The sources said the papers of Cescon were rejected as its partner, Calcutta-based CESC Ltd, failed to give financial and technical commitments. RPG Enterprises was disqualified as it had no technical partner. The shortlisted firms will now submit their technical and financial bids separately. The high-power expert committee of the state government would assess the technical bids first. It will then open the financial bids of those who qualify in the technical round.

The 11 firms that have qualified for the final round of biddings are BSES Ltd (Bhubaneswar); Enron - Emco Transformers Ltd; Disurgarh Power Supply Company(Calcutta) - Cal Energy Co Inc (USA) - Northern Electric Plc (New Castle); Indore Ltd (New Delhi) - Ampa Life Ltd - United Utilities International Ltd (New Delhi); Grasim Industries Ltd (New Delhi) - Singapore Power; Hydro Quebec International Inc (Canada) - HEC Ltd (Noida); National Grid Company Plc (UK) - Energy Australia - Modi Corp (New Delhi); Electriciti De France - IL&FS; Tata Electric Companies - Viridian Group Plc (UK); Reliance Industries - Ecscom; and AES Corporation (USA).

Orissa, which is considered as a model for power sector reforms, is planning to privatise power distribution business by April 1999. The state has been divided into four distribution zones -- Nesco, Southco, Wesco and Cesco -- and each zone has been converted into a separate subsidiary. The government would offload 51 per cent of the stakes in each zone in favour of private firms to be selected through the international competitive bidding route. Energy department sources said that the technical and financial bids will bescrutinised by two expert committees in the months of August and October respectively. The state government is expected to finalise the selection of the companies for partnership in the joint venture by the end of December this year. The joint venture companies would be in a position to run the power distribution business by April 1999, the sources said.

The private sector firms in the joint venture will have the management control over power distribution in the zones and the state-owned Gridco will have the right to appoint non-executive directors (including the chairman) in proportion to its shareholding (one director for each 10 per cent share). The private companies will also need to seek consent of Gridco before making any fundamental change in the business. There will be certain restrictions on transfer of shares by the private partner and by Gridco.