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

State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
(J) ESTABLISHING A DETAILED FINANCIAL ACTION PLAN
The entire plan for continuing the reform efforts, with clear objectives, process,
etc., must be presented, as a White Paper and a medium term plan to make the
sector sustainable, without subsidy, must be evolved. This will, as mentioned
above, indeed call for an aggressive and conscious policy to tackle the
agricultural sector; but the Common Minimum National Action Plan
established by the Chief Ministers’ Conference in 1996 would show the way
forward. Under this Plan, agricultural sector was to pay not less than 50 paise
per kWh, to be brought to 50 per cent of the average cost gradually. The
financial action plan must be firmly established, after getting the approval of
KERC.
(K) ENFORCEMENT OF PERFORMANCE CONTRACT WITH
COMPANIES
The Vision, 2020 Statement prepared by KPTCL for both the transmission and
distribution areas envisages significant capacity additions and capex during the
coming years, as also establishes ambitious management goals. The business
Plans of BESCOM and MESCOM provide useful year-wise targets and goals
for various activities. In order to ensure sustained and efficient performance by
all restructured companies over the years, it would be advantageous to
encourage them to sign annual Performance Contracts with the Department of
Energy. The mechanism of Performance Contracts will also cast corresponding
duties and obligations on Government of Karnataka (Government support to
undertake universal metering, payment of subsidy on time, etc.) as also will go
to enhance the autonomy of the companies.
(L) PARTIAL DISINVESTMENTS OF GOVERNMENT HOLDINGS IN
THE RESTRUCTURED COMPANIES
The DPS indeed announced the firm resolve of Government of Karnataka to
privatise the restructured companies, as also disinvestments in KPCL over
time. It may be recalled that the State Government had also accepted in
principle the recommendations of the consultants to adopt the DM route as a
means to attract prospective investors to bid for all DISCOMs. Subsequently,
as brought out in this Report, the reform process got retarded, and there has
been no development on that front.
3.46