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

Synopsis of State Reports (Vol.-IV)
Study on `Impact of Restructuring of SEBs’
books of KEB were of the order of Rs 2,242.04 crore, the accumulated
depreciation came to Rs 1,333.76 crore and the gross fixed assets came to Rs
4,063.98 crore.
The Board had a staff strength of 45,982, and spent about 19.25 per cent of its
total income on establishment expenditure.
3.4 Electricity Reform Act, 1999 (First Transfer Scheme)
The Administrative Staff College of India (ASCI) carried out a sector study in
1997, and brought out the need for restructuring KEB into one transmission
company, and four or five DISCOMs. Subsequently, in pursuance of the policy
statement issued by the Government of Karnataka, the Karnataka Power Sector
Reform Act, 1999 was enacted. This Act provided for the establishment of the
Karnataka Electricity Regulatory Commission (KERC). It also resulted in the
creation of the KPTCL to carry out all functions of the KEB, which was
dissolved, pending formation of four DISCOMs. The generation units of KEB
were transferred to a new company called VVNL. VVNL is presently
undergoing the process of merger with KPCL. Government of Karnataka also
gave significant financial relief to the sector by taking over loan liabilities of
Rs 1,050 crore, writing off bad and doubtful debts, amounting to Rs 866 crore,
and took over the terminal and pension liabilities of the KEB/KPTCL staff till
the date of restructuring. The process followed by Government of Karnataka
for restructuring of KEB was transparent and demonstrated its political
commitment and support for the reform.
3.5 RESTRUCTURING EXERCISE (SECOND TRANSFER SCHEME)
Based on competent professional advice from reputed consultants, Government
of Karnataka established four DISCOMs (BESCOM, HESCOM, GESCOM
and MESCOM), which started functioning as independent Utilities from June
2002. The new companies were formed with a combined urban–rural mix
jurisdiction. Subsequently, in 2004-05, Government of Karnataka established
one more DISCOM, namely CESCOM, by carving out five districts from
MESCOM, apparently based on political considerations.
3.6 DETAILED POLICY STATEMENT
The Detailed Policy Statement (DPS), issued by the Government of Karnataka
in the year 2001, aimed at the following:
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