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

Maharashtra
(c) Restructuring of MSEB into generation, transmission and distribution companies
and establishment of a holding company;
(d) Continued Government support to weaker sections of the society; and
(e) Government to continue to extend fiscal support during transition period
expected to be of five years till the electricity sector become financially selfsustaining.
Besides the above, timeframe for achieving certain milestones in regard to the
legislative action, restructuring and efficiency improvement were indicated in the
White Paper. At that stage it was envisaged that the restructuring of MSEB would be
taken up in the year 2003.
Restructuring of MSEB
The above timetable for restructuring of MSEB, however, could not be adhered to.
MSEB was subsequently restructured in June 2005, when Government of Maharashtra
followed the mandate under the EA, 2003 and its notification duly extending the
deadline set for restructuring. Government of Maharashtra restructured MSEB into
four companies which were incorporated under the Companies Act, 1956, namely a
generating company - Maharashtra State Electricity Generating Company Limited
(MAHAGENCO), a transmission company -Maharashtra State Electricity
Transmission Company Limited (MSETCL), a distribution company -Maharashtra
State Electricity Distribution Company Limited (MSEDCL), and a holding company -
(MSEB Holding Company Limited) holding government’s equity in these three
companies. The following was the chronology of events:
October 2003
Government of Maharashtra appointed PricewaterhouseCoopers (PwC) as
reform consultants. PwC makes several presentations on various
alternatives of industry structures to various stakeholders including MSEB,
Government of Maharashtra, etc.
September 2004 MERC advised on restructuring of MSEB
October 2004
January 2005
MSEB forms 18 member working group along with consultants to focus on
restructuring requirements in different areas
Cabinet of Government of Maharashtra decided to restructure MSEB into
four companies
Government of Maharashtra restructured MSEB into four companies and
notified the Transfer Scheme
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