Report of Indian Institute of Public Administration ... - Ministry of Power

State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
iii) Simultaneously, a generation company, VVNL, was also constituted to transfer
the generating functions performed by KEB;
iv) Government of Karnataka was to issue a Transfer Scheme 12 to vest the function
of power distribution and assets and liabilities (which were transitorily to be
vested in KPTCL on the dissolution of KEB) in a further ‘licensee’, namely,
DISCOMs to be formed separately; and
v) The Transfer Scheme was to include provisions for the transfer of personnel to
KPTCL or to the newly formed companies, on terms, which were not less
favorable than those applicable to them before the transfer scheme, and in
consonance with the tripartite agreements with the employees.
The Act thus brought to an end the era of Electricity Board in the State. The procedure
followed for the transfer of the functions, assets, personnel, etc, could be considered to
be very methodical and sequentially designed. It is to be mentioned that the State
Government also took over/wrote off the bad and doubtful receivables from
consumers (Rs 866 crore) and past loan liabilities amounting to Rs 1,050 crore, so that
the newly formed entities could function unburdened by the weight of past liabilities.
The passing of the Act and the process adopted were indicative of the determination
and resolution of the Government to make the reform a true success.
KERC started functioning from November 1999, which made a difference to the
working of the sector, and gave a push to the reform efforts. The first transfer scheme
was notified in March 2000.
CONSULTING SUPPORT
The Government engaged a number of consultants to advise on different aspects of the
reform process. These included the following:
i) M/s CMS Cameron McKenna Consortium of UK as Financial and Distribution
Privatisation (FDP) Consultants;
ii) M/s PricewaterhouseCoopers Development Associates Limited, UK, as
institutional strengthening of KPTCL and Power Market Development (ISP)
Consultants;
iii) M/S Mecon Ltd., Bangalore and Knight Piesolo, UK, as Environmental
Assessment Consultants, and
12 The Transfer Scheme was notified on 30 March 2000.
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