World Energy Council (WEC) recently emphasized the need to prioritize
power sector reforms in emerging markets. In India the reforms
process was shaken by a major crisis in the state of Uttar Pradesh
where all the employees of the State Electricity Boards
(SEBs) went on strike to protest against unbundling of the board.
P S BAMI, former Chairman of the National Thermal Power Corporation
(NTPC) has been associated with the reforms process in its
early stages in Orissa, the first state to initiate power sector
reforms. He has been instrumental in giving shape to the reforms
in Orissa. In this exclusive interview to IndiaCore.com,
he emphasizes the need to address the concerns of the employees
and to convince them of that there interests will be safeguarded Excerpts:
reforms process, why do we need to unbundle and privatize electricity
boards? Can we not reform the Boards in their present form?
many issues. How do we insulate the working of the electricity
boards from interference by the politicians? How do we make the
boards and the employees working in them accountable? Today one
gets away with losses, inefficiency and corrupt practices. Vested
interests have crept into the system. Privatization and restructuring
of the State Electricity Boards addresses these issues to a large
is a social aspect in dealing with huge numbers of employees? Do
you think there are private companies in India with adequate skills
and experience in these areas of operation?
my apprehension. There are not many companies, which have the experience
in India. There are very few companies having some experience in
India and there are some foreign companies with experience in other
parts of the world. Perhaps companies that do not necessarily have
experience in private distribution but have good managerial resources
can be involved in tie-up with some of the foreign companies.
reforms process in power sector, do you think the utilities in
the states other than Uttar Pradesh will also face a major road
block with employees and trade unions?
a natural apprehension in the minds of the trade unions (TUs) that
the reforms are not in their favor. There is a concern with regard
to security of job, once the corporations get privatized. The current
crisis was the initial reaction due to these concerns.
were involved in the restructuring of the Orissa State Electricity
Board, a series of workshops and seminars were held in Orissa on
the reforms process with the employees and attempt was made to satisfy
them on the questions they posed.
A lot of
resistance to the reforms process is due to the lack of knowledge
amongst people. Wherever reforms were attempted, no large scale
redundancy of employees took place. There is a need for dissemination
of information. More facts have to be placed before enlarged forum
of employees. We need to present before them cases where similar
situations were tackled earlier. I have been personally involved
in some of the acquisitions by NTPC where similar situations existed.
was involved in the takeover of the Talcher project by NTPC, all
the employees were assured that they would be absorbed and in fact
they were absorbed in the nearby power plant of Kanhiya, Talcher.
The Talcher power plant, which was very old and running at 30 per
cent plant load factor (PLF) is now running at 56 per cent PLF due
to redeployment of workforce and by bringing about a change in the
working environment. Similarly when NTPC took charge of the Rs.
9.2 billion, 420 MW Uchahaar power project from UPRVN to set off
the dues of the Uttar Pradesh State Electricity Board (UPSEB), we
took on board all the employees except the very senior employees
of UPSEB. Though initially there were doubts in the minds of the
employees, there lot is much better now and the performance of the
project has improved immensely. Recently NTPC has added two more
units of 210 MW and it is one of the very good operating stations
in the country. The Badarpur power plant on the outskirts of Delhi,
prior its take over by NTPC was being managed by Central Electricity
Authority (CEA) with a work force of 2700 employees. After the takeover,
over a period of time the work culture in the plant changed. We
added another 210 MW and the performance and productivity improved
significantly. One can see that in these cases, staff was not retrenched
and at the same time higher efficiency levels were achieved.
we convince the employees that they will not loose jobs?
reforms process, it is not necessary that employees will be retrenched.
In fact by improving the efficiency, same workforce can be deployed
in expansion of projects or activities. We need to show them
by demonstration in certain places and projects that the interest
of the employees will be protected. This is part of the mandate,
whereever disinvestment is taking place. However, it is a process
which should be handled carefully using the best in industrial relations
and HRD. In case of distribution privatization, the employees should
be presented with the scenario that improvement in services will
lead to more connections, more consumers, additional power that
has to be consumed. This will lead to more jobs rather than retrenchment.
We need to assure and bring to the notice of employees that if the
prospects of the utility improve, their growth prospects also increase.
On the other hand, if the utilities or the boards are financially
sick, they will stagnate and there will be no growth prospects
for any one. The employees should be able to appreciate that no
organization can stay in a state of sickness.
kind of means should be adopted for this kind of educational process?
be more communication. This could be achieved by holding workshops
and seminars with the employees. Actually what we need is frequent
open house sessions with the employees, where the questions raised
by them can be answered by the management. We need to address their
concerns in a convincing manner. These workshops could be addressed
by people who have credibility. It is not a process between trade
union leaders and the management. We should reach out to the employees
themselves. And then as I said, we need to present case studies
to the employees and also demonstrate through some projects that
the interests of the employees are safeguarded.
is the time scale over which the process is expected to yield results?
Three years have already gone by in the case of Orissa, perhaps
with very little to show in terms of results?
case of Orissa, it is not really so. The process first involved
unbundling, then disinvestment of government holdings and
finally privatization. Orissa reform is now in third mode. The privatization
of the distribution companies took place over the last one year.
Already losses have reduced. With some investments, substantial
improvements in quality of supply and total availability will take
place. This process may take 2-3 more years. In the reforms process,
no dramatic results can be expected. There will be constant and
steady improvement. Managements and the political class have to
be told that it is a long drawn out process. So long as the direction
is right, results will show.
are your views on disinvestment of NTPC
see any sense in disinvestment of NTPC. There are very strong reasons:
1) NTPC is
one of the best managed companies.
2) The stations
are operating very well
3) The Company
is generating substantial profits
major problem they have is in realization of dues from the SEBs.
There is no advantage in privatizing NTPC as far as management and
working of NTPC is concerned. Secondly, the problem of dues is not
going to go away with privatization. It will become more difficult
for privatized NTPC to get its dues. And if the idea of privatizing
NTPC is due to fiscal or budgetary issues - that should be the last
reason. If at all, the power sector needs incremental investments
from the government and not otherwise. I feel disinvestment of NTPC
will be a purposeless exercise. In my opinion, if NTPC's commercial
activity is taken care of and its dues are recovered, then this
organization can add 15,000 MW in five years without any government
support and through its own internal resources and potential to
raise money in capital market.