RELIANCE SCOUTS FOR OPPORTUNITIES IN POWER SECTOR
In Maharashtra, meanwhile, Reliance Industries, is quietly trying to reinforce its position in the power sector.
This report learns the company has set its sights on the Bombay Suburban Electric Supply Company (BSES) - a highly profitable private electricity utility which along with the Tata Electric Company (TEC) supplies most of the electricity to suburban Bombay. In contrast to Delhi, Bombay has relatively few power failures.
Reliance has an existing 10% stake in BSES, and is the single biggest private stake-holder. The rest of the equity is held by state-owned financial institutions and by the public.
In recent months, Reliance has been quietly - either by itself or through dummy investors - buying BSES stock on the Bombay Stock Exchange. Until last year it had a 7% stake in BSES, but has increased this to 10% this year, and hopes to increase it more in the months ahead.
BSES generates 495-MW from a thermal power station at Dahanu near Bombay. It has sought permission to add another 495-MW generating capacity, to be fuelled by LNG or coal.
The state government has yet to clear the proposal though the Maharashtra State Electricity Board (MSEB) says it has no objection. BSES has a turnover of $476m and reported a 1998-99 profit of $62m.
A source tells Petrowatch Enron International - which sees BSES as a consumer for its LNG imports at Dabhol - is helping Reliance in its plan. (see:http://www.bses.com)