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

Highlights of the Transfer Scheme
State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
Restructuring has been done on the basis of the Provisional Transfer Scheme, wherein
the valuation of assets was based on their book value. Government of Maharashtra’s
Resolution of January 2005 mentions that the valuation of the assets of MSEB to be
transferred to the companies should finally be based on revenue potential of the assets
transferred. The assets would be revalued on the basis of their revenue potential within
a period of one year and this revaluation would be effective retrospectively from the
date of transfer. The financial restructuring after revaluation would be structured in
such a manner that the consumers would face minimum increase in tariff.
The final valuation and methodology to be adopted would soon be decided by
Government of Maharashtra. This Transfer Scheme includes the list of assets
transferred, opening balance sheet as on 31 March 2004, functions and duties of each
company. Besides, it allocated the staff division-wise, circle-wise and State-wise
seniority, on as is where is basis to individual companies and has set up committees
for redressal of grievances on allocation of staff to three companies. It has also listed
certain departments/offices at corporate level to provide common services to all three
companies.
Government of Maharashtra’s Financial Support in Restructuring
The following table gives the extent of liability support from the Government of
Maharashtra. Asset adjustments on the right side of the table are part of the balance
sheet strengthening process and are used to match/support the total liability
adjustment of Rs 7,217 crore.
Liability Supports to MSEB from Government of Maharashtra
(Rs crore)
Liability Adjustment Amount Asset Adjustment Amount
Government of Maharashtra Loans 2,742 Retained Earning (Losses)/Reserves 1,980
State Government Bonds 261 Deferred Cost written-off 6
PFC 205 Provision for doubtful debts 4,580
Loans from Banks and Others 150 Govt. Maharashtra Equity Addition 651
Current Liabilities 2,345
Interest Accrued 1,251
Capital Reserves 263
Total 7,217 Total 7,217
Capital Liabilities of the Four Companies
With the above adjustments of liabilities, the capital liabilities of the four companies
are as given in the following table:
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