Reliance outlines distribution, engineering plan for BSES

The business plan, conce
04 February 2003

The business plan, conceived by the petroleum major, which announced its second open offer to acquire the controlling stake in BSES, focuses on a more aggressive foray into the distribution sector, especially in states like Andhra Pradesh, Karnataka and Uttar Pradesh.

The plan also gives much attention to bidding for EPC (engineering, procurement and construction) and O&M (operations and maintenance) contracts for turnkey projects, and increasing the capacity of BSES's coal washeries and generation capacities.

When contacted, a BSES spokesperson said: “RIL is in the process of acquiring a majority stake in BSES. RIL's future plans related to BSES is in a very preliminary stage.“ BSES has been viewed as a powerful vehicle to drive RIL's dreams in the power sector, and make the group an energy conglomerate.

The business plan also envisages more business synergies between BSES and RIL such as the potential use of gas (RIL gas to be used by BSES power plants), telecom (a well coordinated use of BSES Telecom for the development activities of Reliance Infocomm). RIL has so far invested around Rs 1,400 crore to accumulate its holding in BSES. Currently, RIL has a little over 44 per cent stake in BSES.

But, out of the 10 subsidiaries of BSES, only BSES Infrastructure Finance and ST-BSES Coal Washeries are doing well. Others including BSES Kerala Power, three Orissa power distribution companies and BSES Telecom have incurred huge financial losses over the past few years.