The Delhi Government on Thursday received a cheque of Rs 480 crore from Tata Power and Bombay Suburban Electric Supply (BSES) after signing the shareholders' agreement with the representatives of both the companies.

Managing Director of BSES Mr S S Dua handed over two cheques of Rs 234 crore and Rs 59 crore while Tata Power Deputy Managing Director Firdose Vandrevala handed over a cheque of Rs 187 crore to Chief Minister Sheila Dikshit. Thus both the private players have been allowed to take over the power distribution system of the Capital from July 1.

Ms Dikshit termed the signing of the agreement as an important step towards providing quality power supply to the people and also containing the large-scale power theft in the Capital. "The deal has been signed, stamped and closed," she said. "I hope Delhi'ites will feel a difference from July 1 itself. Rampant corruption in the DVB and large-scale power pilferage compelled the Government to take this step in order to improve the power distribution system," she said.

Principal Secretary (Finance) Ramesh Chandra represented the Delhi Government on behalf of the State-owned holding company while Tata Power Deputy Managing Director Firdose Vandrevala and BSES Managing Director S S Dua represented their respective companies. Mr Dua handed over two cheques of Rs 234 crore and Rs 59 crore to Ms Dikshit while while Tata Power gave a cheque for Rs 187 crore for obtaining 51 per cent stake in the DVB.

Health Minister Dr A K Walia, Finance Minister M S Saathi and DVB Chairman Jagdish Sagar, Chief Secretary Shailja Chandra and officials of the two Mumbai-based private companies were also present on the occasion. Ms Dikshit said the signing of the shareholders' agreement was a sequel to the Memorandum of Understanding (MoU) signed by the two companies on May 31.

As per the MoU, BSES will supply power in Central, East, South and West Delhi, while Tata Power will distribute power in North and North-West Delhi. As per the agreement, the distribution will be managed by three companies to be set up - Central and East Delhi Electricity Supply Company (CEDESC), West and South Delhi Electricity Supply Company (WSDESC), and North and North-West Delhi Electricity Supply Company (NNWDESC).

The companies have also agreed to reduce Aggregate Transmission and Commercial (AT&C) losses by 17.25 per cent for Central and East Delhi and 17 per cent for South, West and North and North-West Delhi. "I have received congratulatory messages from the US and England this morning. We are sure we will make a success story out of it," Ms Dikshit said.

The Chief Minister also denied rumours that there would be substantial hike in power tarrif. "We have taken care to protect the interests of the consumers. It is with their interests in mind that the deal has been clinched with the private companies," she said. Tata Power Deputy MD Firdose Vandrevala said, "In fact, power tariff is to be determined by the Delhi Electricity Regulatory Commission (DERC). So this apprehension is baseless."

He said that the existing power tariff structure in Delhi was reasonable. "We will make concerted efforts to change the culture and mindset of the people so that they start paying electricity bills on their own. If we can change the mindset in Mumbai, we can do the same here also," he said.

The initial bids of both the companies had been rejected as they had placed several conditions unpalatable to the Delhi Government, including 16 per cent guaranteed profit for 30 years. During the renegotiations, the Government agreed to alter the original condition of reduction of Aggregate Technical & Commercial loss levels, besides increasing the interest-free loan of Rs 3,450 crore. "As DVB's loss is around Rs 1000 cr every year, this loan amount could be adjusted within three years only," argued the Power Minister Ajay Maken.