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

9.1 BACKGROUND
CHAPTER - 9
GUJARAT
Till the year 1998, Gujarat Electricity Board (GEB) was a profit making SEB
and one of the better run Boards in the country. It had made significant
progress in setting up of 4,861MW generating capacity comprising of thermal,
gas and hydro stations owned by GEB and Gujarat Electricity Generating
Company and extensive T&D network covering the entire State. Gujarat
ranked high among the highly industrialised States in the country. One of the
important contributing factors for this achievement was the comfortable power
supply position in the State.
9.2 FACTORS LEADING TO REFORMS
From the year 1998 onwards however, due to various circumstances, some
beyond the control of GEB, it started incurring losses year after year and the
total losses reached a staggering figure of Rs 6,233 crore by the end of 2002-
03. It became clear to the Government of Gujarat and GEB that such huge loss
levels were unsustainable. The quality of power supply and customer
satisfaction levels had also gone down. To remedy this situation, it became
necessary to restructure the GEB and to achieve turnaround of the electricity
sector in the State and ensure its sustainability.
9.3 OBJECTIVES OF REFORM
The main objective of reforms was to meet the growing demand of electricity
in the State and improve the quality of supply in an efficient and cost effective
manner by improving the financial health of the GEB and the standard of
service to consumers
9.4 Methodology Adopted
Introduction
Way back in the 1990s, the erstwhile GEB had realised that it would become
more and more difficult for it to generate funds required for its expansion plans
nor could it depend totally on the Government of Gujarat and that it would be
necessary to source the required funds from the market. It was clear that for
this purpose, it would be necessary to create suitable corporate structures as a