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

Maharashtra
PRIORITISING INVESTMENTS
The yearly investments proposed in the next to two to three years are very large, of the
order of more than three times the investments made so far in every year. The
companies need to prioritise in selecting from amongst various schemes, for deciding
investments. Schemes with higher returns and quicker pay back period as well as
schemes to remove bottlenecks in the system, should be given higher priority, setting
assessable defined targets in improving performance parameters to be achieved after
completion. A special task force should be set up in each company to oversee and
conduct technical and financial audit and certify the technical specifications,
qualifying criteria for vendors, priorities of taking up schemes for investment, etc.,
before bids for selected schemes are invited, as well as for monitoring their
implementation after work/purchase orders are issued.
From amongst the schemes selected for investment, higher investments could be made
in areas showing better improvements such as further reduction in AT&C losses and
better management of peak demand and energy, etc. This principle of giving
differential treatment on commercial considerations is adopted by MERC in ordering
more hours of load shedding in areas having higher AT&C losses and less hours of the
same in urban and industrial areas having lower AT&C losses. Courts have also
found nothing objectionable in MERC’s decision.
This aspect of allocating investments on sound commercial principles is more
important in respect of a DISCOM where there could be considerable pressure to
spread equitable component of total investments on the basis of each geographical
area irrespective of its revenue earning potential. The company has to guard against
such demands.
STRATEGY FOR OUTSOURCING OF SERVICES
For various reasons, such as reducing cost of operations, faster implementation of
work, need for availing of special expertise not available with the company, limiting
the number of employees in the company, etc., the companies will in future need to
outsource many services presently handled departmentally through in-house staff.
Care should be taken in deciding works/services which could be and which should
not be outsourced. Also, detailed specifications regarding performing the outsourced
activity should be laid meticulously and performance of the agency doing the work
should be checked and verified to ensure that it is in compliance with these
specifications. Priorities in performing the outsourced activity by the agency, if any,
10.7