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

National Report (Vol.-II)
Study on ‘Impact of Restructuring of SEBs’
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6.15.2 Ministry of Power should provide funding support to the CMPAD in the initial
years. However, over a period of time, the CMPAD should become selfsustaining
by pricing its services to the Utilities.
6.16 Accountability and Corporate Governance
6.16.1 To improve corporate governance, it would be desirable to supplement and
strengthen reform efforts with a parallel strategy to involve the public in the
affairs of the companies through participation in their equity base.
6.16.2 Public participation in the equity base of the new companies would accentuate
the autonomy and the accountability of these public corporate bodies to the
public, which is certainly desirable. It will also make the managements of these
undertakings more responsive to corporate objectives, needs and public
perceptions. Viewed from this angle, there is a strong case for offering part of
the shareholdings of the restructured companies to the public and financial
institutions, with a portion earmarked for allotment to the employees of each
company at attractive rates. To start with, such public offerings could be
restricted to 26 per cent of the shareholdings, which would ensure that these
companies retain their status as Government companies. This will also enable
the companies to mobilise funds for their expansion. Any such measure will,
however, have to be preceded by a suitable FRP, which would make the
companies sufficiently attractive for the market to respond to equity
participation and also enable them to absorb market borrowings.
6.16.3 Meanwhile, the initiative should commence with offering part of the shares of
the separate generation companies (as in the case of CPSUs), which are making
profits. Shares of these companies will be attractive enough for the market to
respond positively to any public issue.
6.17 Participation of Civil Society Organisations
6.17.3 The engagement of ‘Grama Vidyuth Pratinidhis’ in Karnataka to augment the
billing and collection has resulted in improved collections. The active
involvement of the customers and customers’ advocacy groups in the reforms
efforts will indeed produce beneficial effects, as evidenced from the
Maharashtra and Karnataka experience. State Governments and the
restructured companies should evolve policies and procedures for increasing
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