International BusinessHimachal unbundles electricity board
After hesitating for four years, the Himachal Pradesh government has finally gone ahead with power reforms by deciding to unbundle the mammoth Himachal Pradesh State Electricity Board (HPSEB).
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According to the notification issued late Tuesday here, the 38-year-old HPSEB will be restructured. Having 23,000 employees on its rolls, it is the single-largest employer among the public sector undertakings of the state government.
On June 15 this year, the HPSEB had ceased to be a unit with the expiry of the deadline issued by the Union power ministry ordering its unbundling.
The state government has formed a six-member committee headed by a chairman to help vest the now defunct HPSEB property, interests, functions and liabilities with another company or a group of companies.
The Centre had made it clear to the state government that the generation, transmission and distribution should be completely segregated.
Officials said the purpose of the re-organisation of the HPSEB according to the Electricity Act 2003, is to create an environment for power reforms by bringing in efficiency and growth.
The HPSEB was once a profit-making company but gradually started to deteriorate. Its accumulated losses recently crossed Rs 250 crore. The board was to be unbundled in June 2005. However, the state government had been seeking a six-month extension since then.
Like many other state and central government-run companies, the new form of the HPSEB will now have to carry out generation, transmission and distribution by trading. This is also expected to bring in investment in the power sector, sources said.
“We must be cautious. If the power reforms are not carried out completely, the Asian Development Bank(ADB) and other funding agencies may stop funding the power sector,” an observer told Business Standard.
Last week, the HPSEB employee leaders had submitted a proposal to the state government urging protection of their service conditions. Top state government sources said these demands of the employees are being examined legally.