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

State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
CONCLUSIONS
INDEPENDENCE OF OPERATIONS OF UTILITIES
The vertically integrated monolithic structure of UPSEB has been dismantled into
separate functions of generation, transmission and distribution. The generation segment
has further been separated into thermal and hydel categories while the distribution one
has now been separated into four entities.
This segregation would be expected to lead to focussed interventions in each of the
individual functions to improve operational and financial performance, identify
investment requirements and improve quality of supply to the consumers. The horizontal
segregation of distribution function into smaller and more manageable geographical
areas was in fact a critical imperative to reduce losses, improve collections and quality of
power supply and ensure better access of electricity in rural areas. These individual
distribution entities would also be expected to encourage positive competitive spirit
among these companies in improving operational efficiencies. However, to foster such
competitive environment and to allow the benefit of collective wisdom to the State, the
entities need to be functionally independent from each other.
However, in Uttar Pradesh, most of the entities are still being headed by a single CMD.
This has considerably negated the benefits of restructuring to the individual companies
and the situation at present, as evident from the data provided in this report, is no better
than that of the erstwhile UPSEB.
CAPACITY BUILDING
The State Government should ensure that these corporations have independent
functioning and follow the principle of one-man-one-post to foster a competitive
environment in operations and facilitate the benefits accruing from unbundling and
reforms to percolate down to the consumers in terms of higher efficiencies and quality
service at affordable cost as stated in the Mission Statement of UP Power Sector Reform
Programme.
The State Government also needs to ensure that the individual entities also have the right
institutional arrangements, which promote efficiency and improvement, both in terms of
cost reduction and increase in collection. The corporations need substantial institutional
strengthening and operational planning. They lack trained technical, financial and
managerial manpower at all levels. This is evident from the fact that the corporations,
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