Independent India's first experiment to encourage competition among power suppliers by roping in more companies so as to achieve reduction in tariff for consumers seemed not taking off soon in suburban Mumbai.
On Tuesday, Reliance Infrastructure (RInfra) was formally announced as the supplier of electricity to entire suburban Mumbai for the next 25 years.
After a public hearing over the claim by five different companies for grant of supply licence, Maharashtra Electricity Regulatory Commission ( MERC)) chairman V P Raja announced RInfra as the only winner. The applications of the other companies-Lanco, India Bulls, Maharashtra State Electricity Distribution Company Ltd ( MSEDCL)) and Torrent Power-were rejected by the bench led by Raja.
Reliance and other companies, if they apply again in near future, will have to offer competitively cheaper rates. Reliance has already promised cheaper tariff over the next five years. This will ultimately benefit the consumers," said a senior power expert working with the commission.
The major legal contentions based on which the applications of the other four firms were rejected were: The firms needed to have 'wire and supply' business together and should have applied for the entire suburban district instead of smaller areas. "In Tata Power's case, Reliance is a second licensee and its wires can be made available to Tata for a certain period but for other companies legally it cannot be done," said an expert.
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