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Power Distribution Contracts

Posted on by Leo

Distribution and Retail Supply is the most critical link in the electricity market, which interfaces with the end customers and provides revenue for the entire value chain.
Indian electricity distribution caters to nearly 200 million consumers with a connected load of about 400 GW that places the country among the largest electricity consumer
bases in the world. The consumers are served by around 73 distribution utilities – 13 electricity departments, 17 private distribution companies, 41 corporatised distribution companies and 2 State Electricity Boards.

It owes to the fact of sustenance of other elements in the sector such as generation, transmission, equipment manufacturing; which depends on its operational performance and commercial viability. However, despite of its critical importance, generation segment has always been on the agenda of the government, in light of high energy deficit, necessitating need of huge capacity addition. Not long back, the Government of India had constituted a committee, headed by Mr. Deepak Parekh, erstwhile Chairman of IDFC, to study the electricity sector in India and suggest for improvements. The report, among other suggestions, remarked the following:
“India’s power sector is a leaking bucket; the holes deliberately crafted and the leaks carefully collected as economic rents by various stakeholders that control the system. The logical thing to do would be to fix the bucket rather than to persistently emphasize shortages of power and forever make exaggerated estimates of future demands for power. Most initiatives in the power sector (IPPs and mega power projects) are nothing but ways of pouring more water into the bucket so that the consistency and quantity of leaks are assured…”

Twenty years after reforms were introduced in the Indian electricity sector, the above remark still holds good. The ‘bucket’ in the above remark is the Indian electricity distribution sector, which consumes no matter how much is generated, without adequately compensating the producers of electricity for the same. Lack of focus has resulted in poor operational and financial performance of the sector, thereby creating greater need of sector transformation, with high calls for private participation in terms of private franchising, public-private-partnership (ppp), equipment suppliers. As a result, tremendous opportunities lie on fore in the sector, for various stakeholders. Thus, this
paper establishes the current scenario of power distribution franchisee in urban power distribution network.

Make In India Projects

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PROGRAM

The Make in India initiative was launched by Prime Minister in September 2014 as part of a wider set of nation-building initiatives. Devised to transform India into a global design and manufacturing hub, Make in India was a timely response to a critical situation: by 2013, the much-hyped emerging markets bubble had burst, and India’s growth rate had fallen to its lowest level in a decade. The promise of the BRICS Nations (Brazil, Russia, India, China and South Africa) had faded, and India was tagged as one of the so-called ‘Fragile Five’. Global investors debated whether the world’s largest democracy was a risk or an opportunity. India’s 1.2 billion citizens questioned whether India was too big to succeed or too big to fail. India was on the brink of severe economic failure.

PROCESS

Make in India was launched by Prime Minister against the backdrop of this crisis, and quickly became a rallying cry for India’s innumerable stakeholders and partners. It was a powerful, galvanising call to action to India’s citizens and business leaders, and an invitation to potential partners and investors around the world. But, Make in India is much more than an inspiring slogan. It represents a comprehensive and unprecedented overhaul of out-dated processes and policies. Most importantly, it represents a complete change of the Government’s mindset – a shift from issuing authority to business partner, in keeping with Prime Minister’s tenet of ‘Minimum Government, Maximum Governance’.

PLAN

To start a movement, you need a strategy that inspires, empowers and enables in equal measure. Make in India needed a different kind of campaign: instead of the typical statistics-laden newspaper advertisements, this exercise required messaging that was informative, well-packaged and most importantly, credible. It had to (a) inspire confidence in India’s capabilities amongst potential partners abroad, the Indian business community and citizens at large; (b) provide a framework for a vast amount of technical information on 25 industry sectors; and (c) reach out to a vast local and global audience via social media and constantly keep them updated about opportunities, reforms, etc.

The Department of Industrial Policy & Promotion (DIPP) worked with a group of highly specialised agencies to build brand new infrastructure, including a dedicated help desk and a mobile-first website that packed a wide array of information into a simple, sleek menu. Designed primarily for mobile screens, the site’s architecture ensured that exhaustive levels of detail are neatly tucked away so as not to overwhelm the user. 25 sector brochures were also developed: Contents included key facts and figures, policies and initiatives and sector-specific contact details, all of which was made available in print and on site.

PARTNERSHIPS

The Make in India initiative has been built on layers of collaborative effort. DIPP initiated this process by inviting participation from Union Ministers, Secretaries to the Government of India, state governments, industry leaders, and various knowledge partners. Next, a National Workshop on sector specific industries in December 2014 brought Secretaries to the Government of India and industry leaders together to debate and formulate an action plan for the next three years, aimed at raising the contribution of the manufacturing sector to 25% of the GDP by 2020. This plan was presented to the Prime Minister, Union Ministers, industry associations and industry leaders by the Secretaries to the Union Government and the Chief Secretary, Maharashtra on behalf of state governments.

These exercises resulted in a road map for the single largest manufacturing initiative undertaken by a nation in recent history. They also demonstrated the transformational power of public-private partnership, and have become a hallmark of the Make in India initiative. This collaborative model has also been successfully extended to include India’s global partners, as evidenced by the recent in-depth interactions between India and the United States of America.