GEB turnaround gets intl recognition

The turnaround story of the erstwhile Gujarat Electricity Board (GEB), now Gujarat Urja Vikas Nigam Ltd (GUVNL), which incurred a Rs 2,500 crore loss in 2000-01, has received global recognition. The company registered a profit of Rs 220 crore in 2006-07

The London Business School, University of London, has selected the case study 'Gujarat Electricity Board Turnaround & Complete Rural Electrification in Gujarat' from the hundreds of entries it received.

The case study points out how the strong political will in Gujarat led to transformation of a loss-making public utility into one of the best public utilities. The study dwells on how GEB started incurring heavy losses and was on the verge of bankruptcy.

"It was a strenuous task for politicians to strike a balance between 'populist' and 'reformist' measures," says the study, which also highlights GEB's efforts to ensure a remarkable reduction in transmission and distribution losses.

"This is an excellent study material for other utilities and organisations for imparting training and capacity building programmes in the areas of infrastructure transformation, innovation, effective management and turnaround of public utility," it points out.

Strong internal communication within the organisation to motivate its employees towards reform resulted in the latter restructuring without any chaos. The sensitisation to the reform was ensured through comprehensive training of 43,000 employees of the total 50,000 so as to bring about smooth transition.

"The comprehensive measures taken to turnaround GEB into different entities for power generation, transmission and four regional distribution companies led to considerable reduction in the transmission and distribution (T&D) losses, remarkable reduction in cost to serve for consumers and technical improvements. As a result, there has been remarkable growth in revenues and improvement in cash flows. A loss-making public utility has been able to achieve financial turnaround without any significant increase in power tariff," the study states.