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

Haryana
WAY FORWARD
STATE GOVERNMENT AND GOVERNANCE ISSUES
For the reforms to succeed in the context of the EA, 2003, the State Government
support is of utmost importance. There has to be an unequivocal commitment to the
model on which the State has undertaken the restructuring in order to achieve the
objectives. The Government support, in the transition period, should not only be in
terms of handholding for providing equity support and financial support for subsidy
but also for defining the roles and accountabilities for various stakeholders in the
reform process. The support of the public to the reform process is crucial through
appropriate communication and dissemination strategies aimed at participation of
advocacy groups in the reform process.
Since the Government is a shareholder, its approach should be to facilitate the
corporate organisational structure of the utilities with adequate financial and
functional autonomy to the power utilities. The number of Government nominees on
the board of the utilities should be kept to the minimum and should preferably be
experts from the related fields.
The Government and the utilities should have mutually agreed areas relating to
managerial and financial autonomy and accountability to achieve the targets and goals
of efficiencies/performance over a defined period. Such MoUs/MoA have been
introduced in the case of central public sector undertakings and similar models could
be considered for power sector.
At the time of restructuring, unfunded liabilities on account of Pension Funds and
Provident Fund Bonds stood at Rs 673 crore and Rs 379.18 crore respectively for
HVPNL and HPGCL. Such unfunded liabilities should have been retained by the State
Government as has been done in other States who have undertaken restructuring of the
SEBs. Transfer of such unfounded liabilities to the Utilities, have made them
financially weak right from their inception stage. There is a need to consider financial
restructuring plan of the Utilities which should provide specific flow of any additional
revenue support to the Utilities and corresponding obligations of the Utilities for
achieving the specified AT&C loss levels. This would obviate the occasional ad-hoc
support, which the State has been providing in the form of waiver scheme etc.
Arrears from the Government agencies are quite large which calls for creation of a
separate budget provision for dues to DISCOMs. The same should be reflected in the
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