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

1.6 ROLE OF MPSEB IN THE REFORM PROCESS
State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
The reform model provides for a unique functional role of the MPSEB after
restructuring of the State power sector. MPSEB has transferred all functions including
assets of the erstwhile Board vide Madhya Pradesh Electricity Reforms Transfer
Scheme Rules, 2006 to the respective Utilities. It has retained two principal functions,
viz., one relating to the cash management during the transition period and the second
function to act as the principal employer till the staff gets allocated amongst the
Utilities. It was explained during the discussions that this was necessitated due to the
compulsions of the outstanding issues relating to the division of staff, assets and
liabilities between the States of Chhattisgarh and Madhya Pradesh. It was also
mentioned that for all practical purposes the staff as on 1 November 2000 has been
allocated to almost 99 per cent but the actual effect to this division will be given after
the guidelines/recommendations are received from the R.P. Kapoor Committee which
is going into the issues of allocation and division of staff, etc., between the two States.
It was also clarified that the MPSEB continues to be the principal employer but full
powers related to punishments, dismissal, etc., have been vested in the CMDs of the
respective Utilities. The State Governments officials feel that this arrangement was
necessary also because of the dispute over the assets and liabilities pertaining to the
erstwhile Board of the undivided Madhya Pradesh. The State Government believes
that while 12 per cent of the generic and project related liabilities were transferred to
Chhattisgarh, 88 per cent of this burden was put on MPSEB, which according to them
was grossly unfair.
1.7 FORMATION OF TRADECO
With the restructuring of MPSEB on functional basis into separate generation,
transmission and distribution companies, the bulk purchase and bulk supply function,
namely, purchase of electricity in bulk from the generating companies including
MPPGCL and supply of electricity in bulk to the DISCOMs were retained with
MPSEB. The Board became the sole buyer of all energy produced by MPGENCO and
continued as a trading licensee till 9 June 2006.
The State Government notified the “Madhya Pradesh Electricity Reforms Transfer
Scheme Rules, 2006” on 3 June 2006. Under these rules a new company called MP
Power Trading Company (TRADECO) came into existence. The related functions of
the MPSEB were transferred to TRADECO.
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