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

Synopsis of State Reports (Vol.-IV)
Study on `Impact of Restructuring of SEBs’
In the above background, the State Government realised that the process of
reform would require restructuring of the power sector and should involve a
long-term commitment to the reform process. In January 2003, Government of
Assam announced a power policy for reform and restructuring of power sector
in the State.
8.2 OBJECTIVES
The power policy, brought out by the Government of Assam, has the following
objectives, among others:
(i) To enable supply of electricity in an efficient and cost-effective manner to
various consumers;
(ii) To restore the financial viability of the State power sector without
burdening the State budget;
(iii) To provide accountability and responsibility for all entities through
corporatisation;
(iv) To set-up an independent Regulator to determine commercially viable
tariff structure in a transparent manner; and
(v) To enable private investment in the sector and promote competition for
efficiency.
A general strategy of how these objectives were to be achieved was also clearly
stated in the policy. Restructuring of ASEB was to be done with functional
specialisation. In the transition period, these restructured entities were to
function under a holding company. The new entities were to be incorporated
under the Companies Act, 1956. Financial restructuring of the present structure
was to be done and a transfer scheme enabling transfer of assets and liabilities
of the ASEB to new successor entities done in a manner so that the companies
become financially viable. The policy went into some important details of
financial restructuring under which accumulated losses of ASEB were to be
set-off against Government’s equity and loans. Provision was also made for
unfunded liabilities relating to pensionary and other retirement dues of the
staff. A single-member Regulatory Commission was set-up in 2001 under the
Electricity Regulatory Commissions (ERC) Act, 1998 and was made a fullfledged
multi-member Commission subsequently.
90