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

Synopsis of State Reports (Vol.-IV)
Study on `Impact of Restructuring of SEBs’
An analysis of the arrears position indicates that the Government departments
also account for a considerable part of these receivables.. The cash gap in the
system is leading to accumulation of losses in the books of the Utilities. The
losses for 2003-04 stood at about Rs 1,700 crore as against Rs 132 crore
during 2000-01, which reveals a worsening situation of the Utilities.
7.5 Way forward and Recommendations
Considering the prevailing situation in the State, the following
recommendations are made:
Independence of Operations: Most of the restructured entities are still being
headed by a common Chairman, Director (Finance), etc. This has considerably
negated the benefit of restructuring to the individual companies and the
situation is no better than that of the erstwhile UPSEB. The State Government
should ensure that these Utilities have an independent functioning and follow
the principle of one-man-one-post to foster a competitive environment in
operations and facilitate the benefits accruing from restructuring and reforms to
percolate down to the consumers.
Capacity Building: The State Government also need 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. It is, therefore, extremely important that
the Government assists these Corporations in quickly strengthening the
management structure and enable independent operations.
Energy Accounting: A robust energy audit measurement infrastructure
considerably assists in pinpointing the problem areas in distribution and
increasing accountability. Consumer indexing and feeder level monitoring of
supplies is a critical part of this efficiency chain. Considerable financial
assistance is available from the Central Government in the form of APDRP
loans and grants to improve the energy audit system of distribution Utilities.
Collections from Government Department/Institutions: The problem of
mounting arrears in the books of the DISCOMs is an area of concern. The
heavy electricity dues from the State Government Departments/Institutions are
also leading to the poor financial health of the DISCOMs. The low collection
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