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

BACKGROUND
GUJARAT
Till the year 1998, Gujarat Electricity Board (GEB) was a profit-making SEB and one
of the more efficiently run Boards in the country. It had made significant progress in
installing 4,861 MW generating capacity, comprising of thermal, gas and hydro
stations owned by GEB and Gujarat Electricity Generating Company and extensive
T&D network covering the entire State. Gujarat enjoyed a high position amongst the
highly industrialised States in the country. One of the important contributing factors
for this achievement was the comfortable power supply position in the State.
From the year 1998 onwards however, due to various circumstances, some of them
being beyond the control of GEB, it started incurring losses year after year and total
losses reached a staggering figure of Rs 6,233 crore by the end of 2002-03. It was
clear to the Government of Gujarat and GEB that such huge loss levels were
unsustainable. The quality of power supply and customer satisfaction levels had also
gone down. To remedy this situation, it became necessary to restructure GEB to
achieve its turnaround and ensure its sustainability.
Faced with this grave situation, Government of Gujarat took a decision to restructure
the Electricity Industry in the State. Government of Gujarat and GEB took a number
of proactive decisions followed by timely supporting actions to ensure a smooth make
over from a large monolithic vertically integrated organisation of GEB to seven
distinct corporate entities. These actions have resulted into most successful and
smooth restructuring of GEB into seven companies as under:
• Gujarat Urja Vikas Nigam Ltd. (GUVNL) A holding company
• Gujarat State Electricity Corporation Ltd. (GSECL) A generating company
• Gujarat Energy Transmission Corporation Ltd. (GETCL) A transmission company
• Madhya Gujarat Vij Company Ltd. (MGVCL) A distribution company
• Paschim Gujarat Vij Company Ltd. (PGVCL) A distribution company
• Uttar Gujarat Vij Company Ltd. (UGVCL) A distribution company
• Dakshin Gujarat Vij Company Ltd. (DGVCL) A distribution company
All the above-named seven companies have become operational from 1 April 2005.
The most noteworthy feature of this exercise was immediate inclusion of
representatives of the unions and associations of the staff in the restructuring process,
right from initial stage after deciding on reforming the sector. It convinced the staff
that Government of Gujarat/GEB management were not pursuing any hidden agenda