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

State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
CHAPTER - 5
LESSONS LEARNT
The lessons learnt from a review of the power sector reform efforts in Karnataka are
very revealing and educative. The procedure followed by Government of Karnataka to
conceptualise, plan and initiate the reform process was by all accounts efficient,
meticulous and well structured. This is evident from the various steps and measures
adopted by it from the beginning; whether it be in the formulation of the policy for
reform, the planning which went into the process, the appointment of competent
external consultants, the establishment of the monitoring and implementation
mechanism, etc, followed by the FRP, institutional strengthening plan, and the mode
of the restructuring exercise itself. The pace of implementation was also quite
appropriate. However, the main intended and planned process does not seem to have
yielded the full-intended outcomes, and the DISCOMs suffer from adverse financial
results attributable to inadequate management systems and external pressures. On the
other hand, the State Government has not been able to reduce the subsidy to the sector
significantly for redeployment in the more deserving social and development sectors,
as expected. This is not to say that the restructuring was a failure; quite the contrary.
In fact, the new companies have been successful in many respects, including metering
programmes, improved billing and collection, energy audit, reduction in AT&C
losses, etc. More importantly, the restructured companies are able to devote more
attention to customer care, which can be regarded as one of the most desired results of
the reform process. But there is no gainsaying that more needs to be done to make the
reform a real success.
The principal lesson that emerges from the study is that it is not enough to put in
place a textbook model for reforms; but all reforms need one or more powerful
and totally committed champions to put them through. It is always convenient to
let things drift; but if the reform is to succeed, it needs bold initiatives, which are
unlikely to come from within the organisation itself.
The most important tool for achieving any task is human resources. Inadequate
attention to develop this valuable resource will have deleterious effects on the reform
efforts. It would appear that in Karnataka, the State Government did not pay
adequate attention to encourage the staff of the KEB to become members of the
restructured companies, also it did not develop a competent cadre of managers
who could take over and function effectively at the top rung of the restructured
companies.
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