SBD for Private Sector Participation in Distribution – Summary
Transfer Scheme to be passed – All assets of utility to vest in SPV with a clean balance sheet free of accumulated losses/ unserviceable liabilities.
2. Winning bidder to acquire 74% or 100% in the SPV
3. State Govt Ownership – to hold 0% or 26%
4. Bid Parameters
a. If AT&C > 15%; Bid parameter is AT&C commitment for 5 years. Successful bidder has to pay a pre-defined takeover value approved by SERC
b. If AT&C < 15%; Bid Parameter is takeover value. There will be pre-defined AT&C loss trajectory for 5 years
5. Policy Directive of state govt (u/s 108/109 of Act) to the SERC to adopt transaction features like AT&C etc
6. AT&C loss – Third party verification of AT&C baseline numbers to be conducted before issuance of bid docs.
7. Sharing of gains upon over achievement of AT&C – 1/3 to consumers
8. Single Stage Two Envelope process
a. QR (Technical and Financial QR)
b. Financial bid
9. Technical QR
a. DL or DF(with 15 years contract) – served 5 lac consumers
b. Transmission Exp – 5000 Cr worth assets developed and operated
c. Generation Capacity – 1000 MW capacity
10. Financial QR
a. Net worth: 2000 Cr for Distribution Exp ||OR|| 4000 Cr for G&T experience
b. Cash Accrual- Last 3 years average: 400 Crores for Distribution Exp ||OR|| 800 Cr for G&T
11. Other QR:
a. Bidder’ Parent/Affiliate should not have been insolvent in last 10 years
b. Not blacklisted by Govt in last 5 years
12. All existing employees must be transferred at existing or better service conditions
13. Terminal liabilities –
a. the concerned State/ UT Government shall responsible for all terminal liability obligations of such employees till their transfer date.
b. The successor entity shall fund necessary contributions towards terminal liabilities on a prospective basis from the date of their transfer.
c. Actuarial valuation to be undertaken and amount to be maintained in Trust
14. Right to use of land at Re 1 per month to be paid to existing Discom / Department. Land not to be transferred.
15. Existing PPAs to be honoured and allocated. If ACS ARR gap is high – all PPAs to be maintained by another entity to manage subsidy for 5 year transition period. The Bulk Supply Agreement will be required only in this case. After 5 years, the ACS-ARR gap should be zero and the PPAs should be allocated to the utility.
16. Incentive on Arrear Collection – 10% and 20%
17. Equity lock in 10 years – permission required from Bid Process Authority
18. Bid Security of 30 Crore
19. This Draft SBD comes with: Draft RFP, Draft Share Acquisition Agreement, Draft Share holders Agreement, Draft Bulk Supply Agreement and a guidance note
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