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

National Report (Vol.-II)
Study on ‘Impact of Restructuring of SEBs’
A6 The valuable inputs and suggestions offered by the above-mentioned persons
are gratefully acknowledged.
B. Overview of the Sector
B1 Capacity additions as a percentage of targets during the Eighth, Ninth and
Tenth Five Year Plans are 54, 47 and 75(anticipated) per cent respectively.
However, the shortfall in the Tenth Plan has been partly offset by improved
plant performance and reduction of T&D losses. Growth in electricity
generation during the Ninth Plan period was three per cent per annum. During
the last three years, growth in electricity generation has been consistently above
five per cent. During the period April to October 2006, the growth rate
recorded was 7.1 per cent.
B2 Energy and peak shortages in 2005-06 were still as high as 8 and 12 per cent
respectively. In order to reduce these shortages, and to meet the increasing
demand in the coming years, during the Eleventh Plan, another 62,475 MW of
generating capacity will have to be added. As per the estimation of the CEA,
this will have to include 13,500 MW from the private sector. Capacity addition
of such a magnitude will call for an additional investment of approximately Rs
5,00,000 crore, to be sourced from both the public and private sectors. The
World Bank estimates also are more or less similar.
B3 The above projection of massive investment requirements in the sector
underscores the need for intensive sector reforms, since on the one hand, the
Utilities in the public sector will have to work more efficiently and improve
their performance to create more investment resources, while on the other, the
sector will have to attract adequate private investments to supplement the
efforts of the public sector. Inevitably, this will call for a change management
involving reorganisation and restructuring of SEBs and fostering competition,
to improve productivity, efficiency and transparency in the sector.
C. Restructuring Models and Progress
C1 The restructuring of SEBs (which have been performing one of the most
essential and basic public service, but had become monopolist, monolithic,
unviable and large organisations) would tend to be a huge exercise, calling for
careful and meticulous planning and execution. The review of the seven States
where the restructuring was completed has led to a finding that “the process is
highly sensitive to several factors; and calls for unstinted political
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