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

5.2 METHODOLOGY ADOPTED
Synopsis of State Reports (Vol.-IV)
Study on `Impact of Restructuring of SEBs’
All the major steps in the restructuring process were taken as envisaged under
the reform scheme:
i) OSEB was restructured and corporatised into Grid Corporation of Orissa
(GRIDCO) and Orissa Hydro Power Corporation (OHPC) with effect from
1 April 1996.
ii) The Orissa Regulatory Commission (OERC) was established on 1 April
1996 and became functional from 1 August 1996.
iii) 49 per cent stake of Orissa Power Generation Corporation (OPGC) was
disinvested and management control was transferred to a private company,
M/s AES, in January 1999.
Second Phase of Reforms
Private Sector Participation in Distribution Segment
Pursuant to the Orissa Electricity Reform (Transfer of Assets, Liabilities
Proceedings and Personnel of GRIDCO to Distribution Companies) Rules,
1998, the Government of Orissa transferred the distribution assets, properties
and personnel of GRIDCO to the four DISCOMs with effect from 26
November 1998. These DISCOMs, namely CESCO, NESCO, WESCO and
SOUTHCO, continued to function as subsidiaries of GRIDCO up-to 31
November 1999 and thereafter functioned under the distribution and retail
supply license obtained from OERC.
In line with the objectives of power sector reform in the State, private sector
participation was allowed in the distribution segment. After considering various
options available for private sector participation, the State Government decided
to adopt the joint sector/joint venture route. The sequence agreed was that the
four distribution zones, which were functioning under GRIDCO, would be
converted into four DISCOMs as fully owned subsidiaries of GRIDCO in the
first stage. Thereafter, disinvestment of these DISCOMs was to be taken up.
It may be mentioned here that no asset sale had actually taken place. The assets
have only been assigned to the respective companies. 51 per cent of the share
capital of the distribution segment has been sold, at a premium, to the private
investors.
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