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

State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
must also induct up to 50 per cent of the total strength of the Board of KPCL, with
independent directors, to be drawn from a panel of experts in field of technical,
financial and management functions.
(ii) Boards of Restructured Companies (KPTCL and DISCOMs)
KPTCL has the Minister for Energy as Chairman, while managing director of KPTCL
functions as the chairman of all the DISCOMs. The Boards have a few functional
directors from each company as members, as required. They also have Principal
Secretaries/Secretaries of departments concerned (Energy, Water Resources etc.) as
members. In the DISCOMs, the local area police and forest officials have been
nominated for coordination. There are also representatives of staff associations on the
Boards, as outside members.
In order to professionalise the Boards and to make them independent and autonomous,
it will be appropriate to reduce the number of Government nominees and to induct in
their place professionals and experts from the fields of management, technology and
other related areas.
Further, it would be appropriate to merge the posts of chairman and managing director
into one, as obtaining in Central Public Sector Undertakings (CPSUs).
FINANCIAL AUTONOMY
Till recently, KPTCL used to undertake several financial functions and activities on
behalf of the DISCOMs. The Company Secretary of KPCL acts in that capacity for
some of them on Company Law matters. This was understandable in the initial period
of the formation of DISCOMs, since they may have been inexperienced and
understaffed. But DISCOMs have been operational for almost four years by now, and
must have built up the required capability and competency to function as full-fledged
corporate bodies. One serious problem facing them all is the non-availability of
competent professionals to take over the senior level financial assignments. Till
recently, even for crucial matters like power purchases, DISCOMs used to depend on
KPTCL; but this practice has since been changed. However, a common purchase
committee is reportedly taking the power purchase decisions, and the DISCOMs
simply implement them. As pointed out by the chairman, KERC, the DISCOMs do
not have the discretion to manage their commercial decisions on innovative basis
since they lack the autonomy. From this angle, it is imperative for the State
Government to install an appropriate scheme to define the extent of management and
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