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

Haryana
The State has yet to formulate a clear policy as to how it proposes to turn around the
two DISCOMs and improve their performance. There is no Financial Restructuring
Plan (FRP) for support to the DISCOMs whose losses have increased even after seven
years of existence. The ad-hoc approach of assistance to consumers in the form of
waiver scheme, as announced recently, may provide one-time infusion of funds to the
Utilities but it would not serve the objective of holding the Utilities accountable for
their performance.
Key Concerns
f.1 The State does not seem to have formulated a clear policy and strategy for the
future direction for the reform process in the State, especially regarding
competition in the generation and distribution segments. Institutional
mechanisms would be necessary to monitor the performance of the DISCOMs,
particularly towards achievement of critical targets on a yearly basis through
MoU/MoA route or any other arrangement of a binding nature.
f.2 There is a need to consider FRP of the Utilities, which should provide specific
flow of any additional revenue support to the utilities and corresponding
obligations of the utilities for bringing down the AT&C losses to acceptable
levels. This would obviate the occasional ad-hoc support that the State has been
providing in the form of waiver scheme, etc.
f.3 The frequent transfers of the senior management, particularly the MDs,
adversely affect the much-needed commitment and focussed attention for
bringing improvement in the functioning of the Utilities. The State may,
therefore, ensure a fixed tenure for the MDs and senior management personnel.
f.4 The State Government’s role was to provide the broad policy framework and
allow the Regulatory Commission to bring about efficiencies through annual
approval of the revenue requirement and expenditure of the Utilities. However,
the study reveals that the Government has not refrained from micro-managing
the Utilities. Also, the Commission’s authority to strictly monitor the
performance has been rendered ineffective by non-compliance of the directives
issued by it.
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