Shimla: Five years after the Electricity Act, 2003 came into effect in many states, Himachal â€“ a power surplus state, finally disbanded HP State Electricity Board (HPSEB) vesting all liabilities and assets with the government, which within six months is to be unbundled into separate generation, transmission and generation companies for bringing about efficiencies.
Holding on till the last date (15th June, 2009) for which extension had been granted to kick-start the power reform process, the government notified vesting of â€˜functions, properties, interests, rights, obligations, liabilities etc. of HPSEB in state government under Section 131(1) of the Electricity Act, 2003 with immediate effect.â€™
For the interim period, a spokesman said, the government has constituted a managing committee comprising of chairman and HPSEB members to administer till the functions, properties etc. are re-vested in a company or companies to be incorporated as government companies.
The scheme to re-vest the board into companies shall be notified within six months. These new companies would be government companies and there is no element of privatization of the board, the spokesman stated.
Whatever the structure of the new companies be, service conditions and pensions of present and past employees would be protected, he added.
The government notification is a climb down for the HPSEB employeeâ€™s union who had been resisting unbundling of the board for the last five years. The board continued to function as a single entity in violation of the Electricity Act, 2003, after being able to obtain extensions from the central power ministry.
However, as much of the funds allocated from the central government come tied to the reforms agenda, the state government was in a tight spot whether to live by the diktats of the union or abide by the law.
Without raising an eyebrow, the government had successfully created two separate companies HP Power Generation Corporation and HP Transmission Corporation, which was not resisted by HPSEB unions.
Prior to the government notification, engineers and employees of HPSEB submitted a draft model based on the Kerala Model for restructuring the board.
The Kerala model is a Marxist model of the board but with a BJP government in power it remains to be seen whether the re-structuring would follow the one the employees have put forth or would go by the aggressive privatization BJP governments in Gujarat, Madhya Pradesh and Chattisgarh have adopted.
Summing up the government action of de-notifying HPSEB, the spokesman said that the objective behind reorganization of electricity board as envisaged in the Electricity Act 2003 is to create congenial environment of reforms in the Power Sector by bringing in efficiencies and growth in the sector.
Apart from electricity boards, there are centre – state governments, PSUâ€™s and private players engaged in generation, transmission, distribution, trading of power and by reorganizing the board into government companies, necessary institutional framework would be available to stimulate investments and growth in a equitable manner in the sector, he said.