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

Assam
(i) To supply adequate quantity of electricity, in an efficient manner and at a
reasonable cost to all consumers in the State;
(ii) To restore the financial viability of the power sector so that it is no longer
a burden on the State exchequer;
(iii) To provide for accountability and responsibility for all power utilities by
restructuring and corporatising them;
(iv) To provide an environment wherein tariff could be fixed in a transparent
manner through an independent Regulator; and
(v) To provide a suitable environment in which private sector investment
could be attracted in the power sector.
3.2 The policy also broadly indicated the general strategy as to how the objectives
outlined in the policy were to be achieved. The policy indicated that generation,
transmission and distribution functions of electricity would be separated and
the resultant entities corporatised to bring in more accountability and
efficiency. It was visualised that the new entities would be incorporated under
the Companies Act, 1956. The policy also visualised that financial restructuring
would be done so that the new entities become financially viable. The new
companies were to have managerial and operational autonomy. As the
Regulatory Commission had already been set up under ERC Act, 1998, it was
mentioned that this would be converted into a full-fledged multi-member
Commission. The policy went into some important details of financial
restructuring through a transfer scheme under which accumulated losses of
SEB would be set-off against the Government equity and loans and provision
will be made for the unfunded liabilities relating to pensionary and other
retirement dues of staff. The Assam Legislative Assembly passed the Assam
Electricity Bill to provide for restructuring and rationalisation of the power
industry The Bill was, however, not enacted since the EA, 2003 came into
effect in June 2003.
3.3 An Appraisal Mission from the Asian Development Bank (ADB) came for
discussions in August/September 2003 for the loan appraisal of Assam Power
Sector Development Programme. Under the conditions agreed to by the
Government of Assam, the Mission recommended a loan of US$ 250 million,
out of which US$ 150 million were to be utilised in the programme component
for independence and corporatisation of ASEB and US$ 100 million was the
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