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

State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
The Government of Gujarat and GEB availed the services on related issues from a
number of consultants, namely M/s CRISIL Infrastructure Advisory Mumbai,
Administrative Staff College of India, M/s Feedback Ventures Mumbai, M/s K.S.
Madhavan & Associates Hyderabad, P.A. Consultants Indonesia, PGCIL New Delhi, ,
etc., to name a few.
The highlights of important milestones as well as other important supporting actions
taken in the intervening period are explained below:
Promulgation of Gujarat Electricity Industry (Reorganisation and Regulation)
Act, 2003
With accumulated total losses reaching Rs 6,233 crore by the end of March 2003, 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 gone
down. To correct this situation it was necessary to reform the power sector so that it
could achieve a turnaround and be sustainable.
On 12 May 2003, the State Government promulgated ‘Gujarat Electricity Industry
(Reorganisation and Regulation) Act, 2003’. The Act inter ala provided for the
following:
• Establishment of the Gujarat Electricity Regulatory Commission (GERC)
• Powers of GERC
• Reorganisation of the Government Electricity Industry, which paved the way for
restructuring of GEB.
Important provisions in the Act from considerations of the staff, are indicated below:
• The first transferee to whom Government of Gujarat will transfer GEB’s assets,
will be companies or bodies corporate owned or controlled by the State
Government.
• Only after due consultation with the first transferee, will the Government transfer
such part of the undertaking to the second transferee (any other company, body
corporate, person, etc.). Further, in case of transfer of controlling interest in the
first transferee or the second transferee by the Government of Gujarat to any
company, body corporate, person, etc., the same will be given effect only with
the prior approval by a resolution of the State Legislature. For the Staff, this
enabling provision provided comfort for expressing its dissent, if any, in future.
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