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

National Report (Vol.-II)
Study on ‘Impact of Restructuring of SEBs’
commitment and support, public sensitisation on the issues involved, highly
placed champions for the reform, excellent consultancy support, cooperation
of the employees and an efficient FRP which would free the newly-formed
Utilities from the burden of past liabilities”.
C2 An important finding is that the untimely withdrawal of political support before
the restructured Utilities stabilise in their working would jeopardise the reform
process. Similarly, consultants should not only assist to frame the models and
chalk out the process of restructuring, but must also provide handholding
support to the new Companies during the initial years. Further, it would be of
prime importance to enlist the support and cooperation of the employees at
various levels, and instill identity and loyalty with the new restructured entities
through change management efforts to bring forth an attitudinal change
amongst them. It should also be ensured that the service interests and career
advancement of the employees under the new set-up are fully protected so that
their loyalty and commitment to the new companies remain intact.
C3 The States, which restructured their SEBs, have in general adopted a more or
less similar model for the process, with a few modifications to suit their
individual requirements. Orissa completed the entire restructuring exercise in
one go, and subsequently allowed private sector participation in the distribution
segment. In other cases, initially, one or two Generating Companies (GENCOs)
and a combined Transmission and Distribution Company were formed as
successors to the SEB; and the former was, in the second stage, restructured
into one Transmission and two or more Distribution Companies. In yet a third
model, the SEB itself was not dissolved, but was retained as a Holding
Company to look after the residual and coordination functions, while forming
one Transmission and different Distribution Companies. The analysis leads to
the conclusion that the second model, adopted by States like Andhra Pradesh,
Haryana, Karnataka and Uttar Pradesh is more appropriate and practical, and is,
therefore, recommended for adoption by the remaining States, which are
mandated under the law to restructure their SEBs.
C4 A related issue is the ideal mix of zones for determining the jurisdiction of the
new DISCOMs. In the cases reviewed, States have adopted an urban-rural mix
as the basis, which appears logical. However, States will have to review this
model at later stages so as to introduce more competition. Similarly, there is
also a need to make the Transmission Company in each State responsible for
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