Reliance bids for 12 power circles in Gujarat

The franchisee model has arrived in the power sector. For the first time ever, the Gujarat government has invited bids on a franchisee model for 10 city distribution circles and three rural distribution circles. The Reliance group has bid for 12 of these.Under the franchisee model, the state government will offer distribution circles only on management contract. As opposed to the existing models of privatisation implemented in Delhi, assets of distribution circles will remain with the state utility and will not be transferred to the private operator. The private company winning the bid for the circle will be required to put in the capital for the modernisation of the system. The rate of return has been pegged at 16% net of taxes for distrib.....