5 firms to replace MP power board

In a bid to improve the power situation in Madhya Pradesh, the state government yesterday issued orders to accord complete autonomy to its five power companies from today.

The autonomy would dissolve the operation and management agreement of the Madhya Pradesh State Electricity Board (MPSEB) with the five companies, MP Power Generation Company, MP Power Transmission Company, MP Poorva Kshetra Vidyut Vitaran Company, MP Madhya Kshetra Vidyut Vitaran Company and MP Paschim Kshetra Vidyut Company, a government official said.

The step aims at improving the power situation by allowing companies to strengthen infrastructure, reduce transmission and distribution losses, improve revenue realisation and provide better quality service, the official added.

The companies would enter separate agreements amongst themselves to commence their business independently, the official said, adding, the government had decided to retain MPSEB for power trading, cash management, debt servicing and some other matters related to Chhattisgarh.

Apart from purchasing additional power to meet demand, the residual MPSEB will also purchase the entire power generated by the state-owned generating stations and from all other sources according to the existing power purchase agreements.

MPSEB would sell power to the three distribution companies using the state's transmission network, while the companies would undertake distribution and retail supply functions, the official said.

With autonomy being given to to the power companies, all consumers of the MPSEB would be deemed to be their consumers, the official added.

However, with no changes in retail tariff, MPSEB will continue to issue bill to the consumers and receive revenue into its accounts on for and behalf of the companies.

In a bid to avoid inconvenience to stakeholders, who were doing business with MPSEB as an integrated entity, the companies would adopt the combined cash-flow management currently operational in the board, the official said.

MPSEB will continue to be the principal employer of its 58,000-odd employees for the time being.

In order to safeguard the interests of pensioners and employees, the past unfunded liabilities pertaining to terminal benefits had been parked in the state transmission utility and the government had made a provision of discharge of pension liabilities out of the revenues of the companies, the official added.

The government order also provides separate provisonal opening balancesheets to these companies, whereby all assets and liabilities of MPSEB have been allocated to the company.

A Rs 4,500 crore assistance to MPSEB for financial restructuring had been provided, in a bid to provide clean and healthy balancesheets to the companies, the official said.