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

State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
and thus built a high trust and confidence about aims and objectives of reforms and
the process proposed to be followed to achieve them. This ensured their full support to
restructuring of GEB. The attitude of the staff in the entire restructuring process
remained positive. If the restructuring exercise adopted by the Government of
Gujarat/GEB (with full and active support of GEB’s staff) were to be summarised in
one word, it is ‘Harmony’. It is an object lesson worthy of emulation by other SEBs
on their path of undertaking a similar journey.
As stated above, a lot of proactive actions to improve the performance of the
organisation were taken concurrently along with the restructuring exercise. As a
result, continuous performance improvements were noticed from the year 2003
onwards. Therefore, instead of looking for specific improvements only in one year
after restructuring, it would be worthwhile to look for progress achieved in the period
2003-05, steps taken by the restructured entities to identify future concerns and ensure
preparedness to deal with these efficiently. This information would be useful for other
utilities that have already been restructured and also to other SEBs, which are yet to be
restructured.
RESTRUCTURING EXERCISE
Preamble
Way back in 1990s, the erstwhile GEB had realised that it would become more and
more difficult for it to mobilise funds required for its expansion plans on its own nor
could it depend totally on Government of Gujarat and that it would be necessary to
source the required funds from the market. It was clear that for mopping funds from
the market, it would be necessary to create suitable corporate structures as a first step.
With this in view a Generating Company named ‘Gujarat State Electricity Corporation
Ltd’ (GSECL) was incorporated by GEB in August 1993 under the Companies Act,
1956. To start with, construction of GEB’s Wanakbori Unit No. 7 and Gandhinagar
Unit No. 5 was taken over by this company. GSECL could raise around Rs 800 crore
from the market. GSECL could repay all debts and became a profit making company.
After the restructuring of GEB, the assets/liabilities of remaining generating stations
of the GEB were transferred to GSECL.
Later on, as a part of an agreement reached with the Asian Development Bank (ADB)
while negotiating Gujarat Power Sector Development Programme Loan, in May 1999
Government of Gujarat incorporated ‘Gujarat Energy Transmission Corporation Ltd
(GETCL) under the Companies Act, 1956. Unlike GSECL, GETCL did not have any
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