Technical Assistance Consultant’s Report AEGCL-HUMAN RESOURCE MANAGEMENT ... NOTES ON THE TEAM ......

Technical Assistance Consultant’s Report

This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents.

Project Number: 41614 March 2012

India: Capacity Development of the Assam Power Sector Utilities

For Assam State Electricity Board (ASEB)

Prepared by

Mercados – Energy Markets International

Madrid, Spain

in association with North Delhi Power Limited (NDPL)

New Delhi, India

ASSAM: CAPACITY DEVELOPMENT OF THE ASSAM

POWER SECTOR UTILITIES – TA NO. 7378 – IND

FINAL REPORT: VOLUME III TRANSMISSION

ASIAN DEVELOPMENT BANK

ASSAM STATE ELECTRICITY BOARD

Prepared by:

MERCADOS – ENERGY MARKETS INTERNATIONAL

Together with:

NORTH DELHI POWER LIMITED (NDPL)

March 2012 MI1190

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Assam: Capacity Development of the Assam Power Sector Utilities – Final Report – Transmission I-2

FINAL REPORT

TABLE OF CONTENTS

!

I BACKGROUND ................................................................................................ I-11!

II CORE BUSINESS .......................................................................................... II-12!

1.! AS-IS ANALYSIS, BENCHMARKING PROCESS AND STANDARDS ................................ II-12!

1.1.! KEY OBJECTIVE OF AS-IS ANALYSIS ................................................. II-12!

1.2.! PROJECT PERFORMANCE MEASUREMENTS ............................................ II-12!

1.3.! BROAD VIEW OF AEGCL PERFORMANCE ............................................. II-12!

1.4.! OVERALL APPROACH TO THE METHODOLOGY FOR TRANSMISSION AS IS ANALYSISII-

13!

1.5.! AS-IS ANALYSIS ........................................................................... II-15!

1.6.! BENCHMARKING PROCESS AND STANDARDS ........................................ II-21!

2.! GAP IDENTIFICATION AND ANALYSIS .............................................................. II-27!

2.1.! TRANSMISSION LOSSES .................................................................. II-27!

1.1.! TRANSMISSION SYSTEM AVAILABILITY .............................................. II-29!

1.2.! PROJECT MANAGEMENT – BID EVALUATION: ........................................ II-29!

1.3.! PROJECT MANAGEMENT–COMPLETION OF TRANSMISSION PROJECTS ......... II-29!

1.4.! SYSTEM VISIBILITY TO THE SLD OPERATOR THROUGH SCADA AND

COMMUNICATION MECHANISM IN ENSUING REAL TIME DATA AND REAL TIME NET WORK

ANALYSIS .............................................................................................. II-29!

1.5.! STANDARDISATION OF DESIGNS: ...................................................... II-30!

1.6.! TRANSMISSION SYSTEM MAINTENANCE: ............................................. II-31!

2.! RECOMMENDATIONS AND COMPREHENSIVE FINAL ACTION PLAN ............................... II-31!

2.1.! SHORT TERM ACTION PLANS ........................................................... II-31!

2.2.! MEDIUM TERM ACTION PLANS ......................................................... II-32!

2.3.! LONG TERM ACTION PLANS ............................................................. II-34!

2.4.! IMPLEMENTATION IMPERATIVES AND ENABLERS ................................... II-36!

2.5.! RESPONSIBILITY FOR IMPLEMENTATION ............................................. II-36!

2.6.! PROPOSED PERFORMANCE MONITORING INDICATORS/CRITERIA ............. II-37!

V ACCOUNTANCY AND FINANCIAL MANAGEMENT ......................................... III-39!

1.! AS-IS ANALYSIS, BENCHMARKING PROCESS AND STANDARDS ............................... III-39!

1.1.! KEY OBJECTIVE OF AS-IS ANALYSIS ............................................... III-39!

1.2.! PROJECT PERFORMANCE MEASUREMENTS .......................................... III-39!

1.3.! ACCOUNTANCY MANAGEMENT ........................................................ III-39!

1.4.! FINANCIAL MANAGEMENT SYSTEMS ................................................. III-64!

1.5.! 10 YEAR BUSINESS PLAN .............................................................. III-80!

VI AEGCL-HUMAN RESOURCE MANAGEMENT .................................................. IV-86!

1.! AS-IS ANALYSIS, BENCHMARKING PROCESS AND STANDARDS ............................... IV-86!

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1.1.! KEY OBJECTIVE OF AS-IS ANALYSIS ................................................ IV-86!

1.2.! PROJECT PERFORMANCE MEASUREMENTS ........................................... IV-87!

1.3.! ASSUMPTIONS ............................................................................. IV-91!

1.4.! AS-IS ANALYSIS .......................................................................... IV-92!

1.5.! BENCHMARKING PROCESS AND STANDARDS ..................................... IV-103!

2.! GAPS IDENTIFICATION AND ANALYSIS ........................................................... IV-104!

3.! KEY CONCERNS OF STAKEHOLDERS .............................................................. IV-104!

4.! RECOMMENDATIONS AND COMPREHENSIVE FINAL ACTION PLAN ............................. IV-105!

4.1.! SPECIFIC ACTIONS RECOMMENDED, BUDGET, AND EXPECTED IMPACT .... IV-105!

4.2.! IMPLEMENTATION IMPERATIVES AND ENABLERS ................................ IV-110!

4.3.! RESPONSIBILITY FOR IMPLEMENTATION .......................................... IV-110!

4.4.! PROPOSED PERFORMANCE MONITORING INDICATORS/CRITERIA .......... IV-111!

VII INFORMATION TECHNOLOGY ................................................................... V-111!

1.! AS-IS ANALYSIS, BENCHMARKING PROCESS AND STANDARDS ............................... V-111!

1.1.! KEY OBJECTIVE OF AS-IS ANALYSIS ................................................ V-111!

1.2.! PROJECT PERFORMANCE MEASUREMENTS ........................................... V-112!

1.3.! AS-IS ANALYSIS .......................................................................... V-118!

1.4.! APPLICATIONS ............................................................................ V-119!

1.5.! NETWORK CONNECTIVITY .............................................................. V-119!

1.6.! DATA CENTRE INFRASTRUCTURE ...................................................... V-119!

1.7.! BENCHMARKING PROCESS AND STANDARDS (REVIEW OF NATIONAL AND

INTERNATIONAL BEST PRACTICES). CASE STUDY: ANDHRA PRADESH (AP) TRANSCO

IMPLEMENTS ERP .................................................................................. V-119!

2.! GAPS IDENTIFICATION AND ANALYSIS ............................................................ V-121!

2.1.! GENERAL OVERVIEW OF IT GAPS ..................................................... V-121!

2.2.! SPECIFIC GAPS OF AEGCL ............................................................. V-122!

3.! RECOMMENDATIONS AND COMPREHENSIVE FINAL ACTION PLAN .............................. V-122!

3.1.! SHORT TERM ACTIONS (QUICK WINS) .............................................. V-122!

3.2.! MEDIUM TERM ACTIONS ................................................................ V-123!

3.3.! LONG TERM ACTIONS .................................................................... V-124!

3.4.! IMPLEMENTATION IMPERATIVES AND ENABLERS .................................. V-124!

3.5.! RESPONSIBILITY FOR IMPLEMENTATION ............................................ V-126!

3.6.! PROPOSED PERFORMANCE MONITORING INDICATORS/CRITERIA ............ V-126!

VIII SUMMARY OF ACTION PLAN ................................................................. VI-128!

IX ANNEX TO CORE BUSINESS .................................................................... VII-148!

1.! MAINTENANCE ACTIVITIES MEET BY INDIAN TRANSMISSION COMPANIES. ................ VII-148!

1.1.! SUBSTATIONS’ POWER EQUIPMENT MONITORING ............................. VII-148!

1.2.! TESTING EQUIPMENT .................................................................. VII-149!

1.3.! ROUTINE MAINTENANCE ............................................................. VII-149!

2.! GAPS AND IMPROVEMENTS RELATED TO PROCUREMENT, CONSTRUCTION, OPERATION AND

MAINTENANCE .......................................................................................... VII-150!

X ANNEXURE TO FINANCE SECTION .......................................................... VIII-161!

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1.! BRIEFING ON CAPITAL INVESTMENT & BUSINESS/FINANCIAL PLANNING ................ VIII-180!

1.1.! WORKSHOP ATTENDANTS ......................................................... VIII-180!

1.2.! PRESENTATION ....................................................................... VIII-181!

2.! 10 YEAR AEGCL BUSINESS PLAN ............................................................ VIII-202!

2.1.! INTRODUCTION .................................................................. VIII-203!

2.2.! THE BUSINESS PLAN ........................................................... VIII-204!

2.3.! ORGANIZATION .................................................................. VIII-214!

2.4.! SUB-ANNEXES .................................................................... VIII-215!

XI ANNEX TO HUMAN RESOURCE ................................................................. IX-221!

1.! HRSC ROADMAP MPP .......................................................................... IX-221!

2.! HRSC ............................................................................................... IX-221!

2.1.! CGM HR ROLE .......................................................................... IX-221!

2.2.! AUGMENTED HR AND TRAINING ORGANISATION ............................... IX-222!

2.3.! HIRING (APPOINTING) OF AUGMENTED HR AND TRAINING STAFF ........ IX-223!

2.4.! HRSC ACTION PLAN(S) .............................................................. IX-224!

2.5.! HRSC TOR .............................................................................. IX-225!

2.6.! SAMPLE ADS FOR CGM AND HR EXECUTIVE TRAINEES ....................... IX-228!

2.7.! TRAINING PROGRAM HR TRAINEES AND MANAGEMENT ...................... IX-229!

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LIST OF TABLES

Table 1 - AEGCL Assets Summary ........................................................................................ I-11!

Table 2 - Voltage operating range ........................................................................................ II-15!

Table 3 - Roles and responsibilities in AEGCL's organisation .................................................... II-15!

Table 4 - Energy losses (%) in various Transmission companies .............................................. II-22!

Table 5 - Time taken for Bid evaluation and approval ............................................................. II-23!

Table 6 - IT facilities in for-comparison Transmission Utilities .................................................. II-24!

Table 7 - Annual Energy Losses AEGCL ................................................................................. II-27!

Table 8 - Transmission Utility Energy Losses ......................................................................... II-28!

Table 9 - Transmission System Availability ........................................................................... II-29!

Table 10 - IT Implementation / Software Requirement for Transmission system ........................ II-33!

Table 11 - Responsibility for implementation ......................................................................... II-37!

Table 12 - As-Is-analysis of accounting system: AEGCL ........................................................ III-40!

Table 13 - Financial Risks Classification Example ................................................................. III-71!

Table 14 - Summary Table covering the above points – Organisational Controls ....................... III-73!

Table 15 - Organization structure As-Is analysis ................................................................... IV-92!

Table 16 - HR management and policies As-Is analysis .......................................................... IV-93!

Table 17 - Examples of RTO tiers ....................................................................................... V-115!

Table 18 - Possible RTO tiers ............................................................................................ V-115!

Table 19 - Printers configuration ....................................................................................... V-118!

Table 20 - Software to be procured .................................................................................. VII-156!

Table 21 - AEGCL Capital Investment Plan: Total 2008-2012; and FY2008-2009 ................... VIII-161!

Table 22 - AEGCL Key Planning Data ............................................................................... VIII-215!

Table 23 - AEGCL Key CAPEX Planning Data ..................................................................... VIII-216!

Table 24 - Profit & Loss Account ..................................................................................... VIII-217!

Table 25 - Cost Abstract of the 12TH Five Year Plan Related To Intra-State Transmission & Transformation Projects ................................................................................................ VIII-219!

Table 26 - Interest during Construction of the Proposed Lines and Sub-Stations Works .......... VIII-220!

LIST OF FIGURES

Figure 1 - Organisation structure of AEGCL ........................................................................... II-15!

Figure 2 - Organisation structure at corporate level ............................................................... II-17!

Figure 3 - Organisation structure at director of projects level .................................................. II-18!

Figure 4 - Organisation structure at director of operations level ............................................... II-18!

Figure 5 - Equipment Losses according to EPRI ..................................................................... II-26!

Figure 6 - AEGCL’s Organization chart ................................................................................ III-65!

Figure 7 - AEGCL’s budget control process .......................................................................... III-67!

Figure 8 - Mapping of ASEB's IT governance ....................................................................... V-113!

Figure 9 - Business value obtained from IT ......................................................................... V-113!

Figure 10 - Sources of Network Device Downtime ................................................................ V-114!

Figure 11 - Power usage effectiveness ............................................................................... V-118!

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NOTES ON THE TEAM

The consultant team is led by Mercados Energy Markets International, working in collaboration with the North Delhi Power Limited.

In addition the following firms have provided experts for various components:

Indra S.A.

Evonik Energy India Pvt. Ltd.

Power Research and Development Consultants Pvt. Ltd

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Glossary

Acronym Full Name

ABC Aerial Bunched Cables

A/C Account

AMR Automatic Meter Reading

ATC Aggregate Technical and Commercial

SRS Software Requirement Specification

ADB Asian Development Bank

AEGCL Assam Electricity Grid Corporation Limited

AERC Assam Electricity Regulatory Commission

APGCL Assam Power Generation Corporation Limited

APDCL Assam Power Distribution Company Limited

ASEB Assam State Electricity Board

BIS Bureau of Indian Standard

BMS Building Management System

BPR Business Process Restructuring

Capex Capital Expenditure

CAEDCL Central Assam Electricity Distribution Company Limited

CEA Central Electricity Authority

CERC Central Electricity Regulatory Commission

Ckt Circuit

Crore Indian Unit equivalent to 10,000,000 (ten million)

DC Data Centre

DoP Department of Power

DPR Detail Project Report

DR Disaster Recovery

Discom Distribution Company

EA Electricity Act 2003

ERC Electricity Regulatory Commission

ERP Enterprise Resource Planning

EHV Extra High Voltage

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Acronym Full Name

EHS Environment Health and Safety

FE Front End

FTE Staff Full Time Equivalent

FY Financial Year

GAAP Generally Accepted Accounting Principles

GCC General Conditions of Contract

Genco Generation Company

GOA Government of Assam

HR Human Resource

HRM Human Resource Management

HV High Voltage

IEGC Indian Electricity Grid Code

INR Indian Rupees

IEC International Electrotechnical Commission

IGNOU Indira Gandhi National Open University

IT Information Technology

Kcal Kilo Calorie

Km Kilometre

KPI Key Performance Indicator

KWH Kilo Watt Hour

Lakh Indian Unit equivalent to 100,000 (a hundred thousand)

L/C Letter of Credit

LV Low Voltage

MD Managing Director

MIS Management Information Systems

MMSCMD Million Metric Standard Cubic Meter Per Day

MOEF Ministry of Environment and Forest

MP Madhya Pradesh

MPP Manpower Planning

MVA Mega Volt Ampere

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Acronym Full Name

MVAR Mega Volt Ampere Reactive

MW Megawatt

MU Million Units

NDPL New Delhi Power Limited

NLDC National Load Despatch Centre

NTPC National Thermal Power Company Limited

NE North East

O&M Operation and Maintenance

O/H Overhead

OPEX Operating Expense

PGCIL Power Grid Corporation of India Limited

PLF Plant Load Factor

PMU Project Management Unit

PPA Power Purchase Agreement

PWC Price Waterhouse Cooper

RAID Redundant Array of Independent Disks

RLDC Regional Load Despatch Centre

RAB Regulatory Asset Base

R&M Repair and Maintenance

SBU Strategic Business Unit

SCC Special Conditions of Contract

SDO Sub-Divisional Officer

SEB State Electricity Board

SLDC State Load Despatch Centre

STU State Transmission Utility

SAN Storage Area Network

SCADA Supervisory Control and Data Acquisition

SRS System Requirement Specification

TA Technical Assistance

TL Team Leader

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Acronym Full Name

TNA Training Needs Assessment

Transco Transmission Company

U/G Underground

UPS Uninterrupted Power Supply

USAID United States Agency for International Development

WB World Bank

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I BACKGROUND

The transmission and system operations functions are critical for efficient operations of the power systems and markets and have a significant role in attaining the policy and legislative objectives. The entire set of provisions of the Electricity Act, 2003 (EA 2003) related to introduction of competition, power trading and exchanges, open access, captive generation are heavily reliant on the transmission companies (particularly the State Transmission Utilities and SLDCs) to schedule and transmit the energy, implement open access, manage the networks efficiently to ensure that schedules are executed, and account for the trades. These entities are thus the lynchpins of electricity sector operations in the new environment. The core transmission planning, procurement & construction activities, system maintenance and system operational activities require to undergo sea change in a very complex and dynamic environment that is emerging in the regional and state levels. With increasing merchant generation and traded power on the anvil, transmission systems have to be designed to address such dynamics, and then constructed in a timely manner and adequately maintained.

Assam Electricity Grid Corporation Limited, a Public Sector Company registered under ‘Company Act, 1956’ was formed out of restructured Assam State Electricity Board in 2003 and was notified as the State Transmission Utility (STU). Assam Electricity Grid Corporation Limited is playing a strategic role as it is the largest ‘STU’ in NE region and evacuating their fair share of power to other sister transmission utilities in the North Eastern region. It is maintaining EHV transmission system comprising 220kV, 132kVand 66 kV EHV transmission network and substations. Its core business is to efficiently evacuate electrical power from electrical power bulk generating stations and CTU transmission network to the distribution company networks in the state of Assam and STUs of neighbouring NE states.

Table 1 - AEGCL Assets Summary

EHV lines above 66 kV voltage class 4481 ckt Km

EHV sub-stations 51 Nos.

Transformation capacity 2984 MVA

Reactive compensation at 33 kV bus 195 MVAR

Assam Electricity Grid Corporation Limited has consistently maintained the transmission system availability over 99% which is at par with other National Transmission Utilities of the country

In order to develop strong institutional capacity and robust internal processes and procedures to make the organization more “projects oriented”, Assam Electricity Grid Corporation Limited (AEGCL) must pursue effective implementation of a new organization structure, re-engineered business processes and performance management systems.

The main functions involved in the transmission system are:

• Planning of system strengthening & system expansion

• D.P.R preparation and investment approvals.

• Procurement process and awarding the work.

• Work Execution including Project management, effective monitoring, adopting best Construction Practices, quality management & Testing & Commissioning.

• System Maintenance.

• System operation.

• Complying with provisions of regulatory directions / obligations.

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Assam: Capacity Development of the Assam Power Sector Utilities – Final Report – Transmission II-12

II CORE BUSINESS

1. AS-IS ANALYSIS, BENCHMARKING PROCESS AND

STANDARDS

1.1. KEY OBJECTIVE OF AS-IS ANALYSIS

The objectives of the AEGCL, the transmission utility is to provide reliable, quality, adequate and secured power supply to all its costumers i.e. to Distribution utilities, EHT & Open access customers, other neighbouring state transmission utilities; most economically, with minimum energy losses in the transmission system.

• The reliability is defined as the degrees to which the performance of the elements of the system result in power being delivered to customers within accepted standards.

• Adequacy is defined as the ability of the system to supply the aggregate power and energy requirements of the consumers at all times.

• Security is the ability of the system to withstand sudden disturbances.

• Quality of the power supply in the transmission system is defined as the voltage to customers at inter phase points to be within specified % regulations

1.2. PROJECT PERFORMANCE MEASUREMENTS

The performance of the AEGCL will be assessed based on the following parameters:

• % Availability of Transmission system.

• % Peak power losses and % Energy losses.

• Maintenance of grid discipline as per regulatory norms.

• Year wise Availability of transmission capacity for Open Access.

• System visibility to the SLD operator through SCADA & communication. Mechanism in ensuing Real time data & Real time network analysis.

1.3. BROAD VIEW OF AEGCL PERFORMANCE

The performance of present transmission system is found to be “Good” as assessed by following standard parameters.

• Transmission availability is more than 99 % as against minimum requirement of 98.5 % as per AERC grid code.

• The Transmission system energy losses are brought down from 8.41 % from the year 2006-07 to about 4.31 % during 2007-08, 5.36 % during the year 2008-09 and 6.08% during the year 2009-10 (Which is on par with national standards) in spite of steep increase in the system peak load of 678 MW in the year 2006-07 to about 1000 MW during 2009-10 i.e. an increase of about 30 % in 3 years.

• But the increase in the transmission losses from 4.31% to 6.08 % in two years is an alarming trend, which shall be arrested and brought back to about 4.0%.

• The performance would have been “Excellent” but for this reason

• There are no major Black outs & Brown outs (as informed by operating staff of SLDC) during the year.

a) The good performance of AEGCL is due to following reasons:

• The system strengthening by establishing additional 23 substations during the period from 2006-07 to 2009-10 thus increasing the total substations in AEGCL from 28 to 51 No’s along with associated transmission lines

• Establishing 195 MVAR reactive compensation in the system (33 kV substations)

b) The above mentioned huge expansion of the Transmission works have been carried out through financial assistance from ADB, based on the transmission planning report of the consultant during the year 2006-07 & subsequent studies conducted by AEGCL during the year 2007-08 based on the load forecasting of consultants & CEA 17th EPS.

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c) Maintenance of Transmission system and safety aspects:

• Regular and Periodic maintenance of transmission system is of utmost importance for maintaining system reliability & availability of transmission system.

• It may be extremely difficult for AEGCL to maintain the present level of Transmission system availability un less performances of the utility in various functionaries are:

o Closely reviewed.

o Identify any gaps between the standards and existing procedures

o Remedial measures taken for rectifying the gaps found in a phased manner.

• This conclusion has been arrived:

o On physically observing the condition of one of the important Sarasajai 220/132 kV substation in Guwahati, which require renovation & modernisation immediately, though break downs have not occurred during last 2 years the same cannot be ensured in future with the present condition. .

o The 28 No’s of substations including Sarasajai and associated transmission lines are quite old and requires constant monitoring and maintenance to keep them in good operating condition.

1.4. OVERALL APPROACH TO THE METHODOLOGY FOR TRANSMISSION AS IS

ANALYSIS

To achieve the above objectives, the performances of the utility in the following function areas of AEGCL have been reviewed:

1. Planning

a) Load forecasting: Long term load forecasting is the fundamental prerequisite for the long term planning.

b) Perspective Transmission planning:

• The Transmission system to be planned and developed most economically to achieve the specified objectives, by conducting load flow studies, and test the proposed system by conducting the stability and contingency studies. The short circuit studies to be conducted for designing the circuit breaker ratings, earth mats etc.

• The transmission system projects are highly capital incentive, requires huge capital investments and the gestation period of projects is ranging from 2 to 3 Years, and hence long term perspective plan to be prepared for mobilising the capital and identified projects are to be taken up for execution at least 3 years in advance to facilitate completion & commission during planned horizon year to meet the expected loads.

2. Design

The proper design of the transmission system comprising Transmission lines and substations plays an important role for achieving the specified objectives most economically. The following aspects are to be considered:

• The optimisation of Transmission line Tower & Foundation designs for various wind Zones, Terrain categories, and soil conditions of Assam State etc.

• Selection of proper conductor sizes and standardisation.

• Proper selection of Bus Switching schemes of substations depending on the required reliability of power supply at various voltage classes / locations of the substations.

• Selection of equipment with latest technological innovations for better performance of the system.

• Proper insulation co-ordination and providing effective protection equipment for safety & security of the system.

• Standardisation of Bus bar sizes, Bus bar types, bay widths, sectional & Ground clearances.

3. Procurement

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The proper procurement policies, procedures, timely actions, conditions are required for selection of:

• Techno-commercially qualified. Competent supplier/contractor for supply /execution of the project with best quality material as per specifications, in schedule time to facilitate the efficient project development within the specified period.

• Economical execution of the projects.

4. Execution

The basic necessities for project executions are:

• Strict quality control both for material / equipment inspections and execution of works.

• Effective monitoring for timely completion of the projects as per schedule.

• Providing all safety measures for supervisor & work force avoiding any mishaps.

• Execution of projects as per the planning / DPR.

5. Operation

Operation is assessed in terms of:

• How far the system is operated in terms of grid code compliance.

• Maintenance of grid discipline in terms of UI mechanism as per CERC regulation.

• Assessment of year wise transmission system brown outs and black outs

• SCADA/Automation of transmission system

• System suitability for SCADA operation.

• Communication mechanism in ensuing real time data & Real time network analysis

• Substation automation & control system for effective operation of unmanned substations

6. Maintenance

The maintenance schedules notified / scheduled and compliance of the same with respect to schedules.

7. Regulatory compliance / affairs

a) The state electricity regulator desires the transmission company to improve performance and reduce the cost of transmission charges. Accordingly the state electricity regulator sets a number of performance standards to be achieved by the transmission utility. The performance indicators generally considered are

b) All Users, SEB, SLDCs, RLDCs, and NLDC shall take all possible measures to ensure that the grid frequency always remains within the 49.5 –50.2 Hz band.

c) All Users, STU, RLDC, NLDC and CTU shall provide and maintain adequate and reliable communication facility internally and with other Users/STUs /RLDC/SLDC to ensure exchange of data/information necessary to maintain reliability and security of the grid.

d) The minimum transmission system availability shall be 98.5%

e) Voltage Management:

• All Users, RLDC, SLDC, STUs, CTU and NLDC shall take all possible measures to ensure that the grid voltage always remains within the following operating range, to prevent voltage collapse. And shall ensure its effective application to prevent voltage collapse/ cascade tripping.

• Maintenance of grid discipline in terms of frequency, Bus Voltages & communication facilities as indicated above

• Complying with the provisions of the regulatory directions issued

• Publishing the Availability of Transmission capacity for open access in the web site of AEGCL.

• Publishing of yearly % energy losses & open access charges in web site of AEGCL.

• ERC filings with regulatory commission

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Table 2 - Voltage operating range

Voltage (kV r m s)

Sl. No Nominal. Maximum Minimum

1 765 800 728

2 400 420 380

3 220 245 198

4 132 145 122

5 110 121 99

6 66 72 60

Thus, Mercados EMI team will review the above aspects within AEGCL to identify areas where further improvement is possible.

1.5. AS-IS ANALYSIS

1.5.1. ORGANISATIONAL STRUCTURE

The existing structure of the headquarters of AEGCL has been obtained from September 2010 report prepared by PWC for AEGCL under ADB’s Energy Enhancement Project in Assam. The organization structure is depicted in the following figure.

Figure 1 - Organisation structure of AEGCL

The broad roles and responsibilities of the different positions are as follows:

Table 3 - Roles and responsibilities in AEGCL's organisation

Sl.

No

Function /

Position Broad Roles & Responsibilities

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1 CGM (Finance & accounts)

• Financial Audit.

• Compilations

• Establishment.

• Budget & cost.

• Pension & Trust

2 G.M (Head quarters)

DGM -1:

• Supervision & coordination at Head quarters level related to substations

• Planning & scheme preparation of both Substations & Transmission lines.

• Procurement substations

DGM-2:

• All works of Head quarters related to Transmission lines.

• Tendering & monitoring.

• Commercial function.

• Procurement Transmission lines.

3 GM (LAZ & UAZ) • Supervision & coordination of circles in Zones.

• Monitoring of New substations & Transmission lines.

• Operation & Maintenance of Transmission system in the Zones.

• Budget allocation to the field units.

4 DGM (Civil) • Preliminary construction works for substations.

• Maintenance & up keep of Colonies.

• Transmission line tower foundation works.

• Checking & approval of civil works in substations & Transmission lines.

• Issuing completion certificates.

• Conducting pre construction survey, geotechnical testing etc.

5 DGM (Transmission design)

• Preparation of DPRs. for transmission schemes.

• Power system studies & Load flow studies

• Preparation of bidding documents.

• Commercial evaluation of bids.

• PTCC clearances.

• Provision of services to the DISCOM on chargeable basis.

6 DGM (H.R) • Man power planning.

• Recruitment activities.

• Performance appraisals.

• Training & development activities.

• Establishment.

• Transfers, Promotions, Grievance redressal and disciplinary actions

7 DGM (SLDC) • System operation & Load dispatch.

• Operational planning& scheduling and dispatch of electricity

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8 DGM (MRT) • Supervision & coordination of testing and commissioning jobs at division level.

• Maintenance of total grid discipline.

• Ensuring technical support to all the field staff.

9 Senior Medical officer

• Approval of medical bills.

• Liaison with local hospitals & medical practitioners.

10 Company secretary

• Act as company secretary on behalf of BOD.

• Maintain details of Board meetings and other statuary compliance

11 SM (security) • Regarding security matters.

Structure drives conduct, which in turn drives performance. Mercados EMI team believes that any change in the business processes of the company must start with assessment of the organizational structure of the company. Once the high level structure is in place many other changes within the organization flow by itself and make the process of implementation of smaller changes much more structured, meaningful and simpler. Several process changes envisaged in the various other sub-tasks will also require that the organization structure of the organization is aligned closely to ensure effective implementation and prompt decision making on implementation issues. The Mercados EMI team will undertake a detailed analysis of structural change requirements and benchmark the same with comparable utilities to identify and recommend a suitable structure for AEGCL. Hence a comprehensive analysis of the various areas will be undertaken early in the process to identify the specific changes required in the corporate and field level structure and the implications of such change on operations, systems and processes. Specifically some of the key assessment will include:

• Analysis of the organization& its strategic plans

• An assessment of the suitability of the current organizational structure and proposals for alternative structures to better meet current and future internal and external market needs

• An examination of the current strengths, weaknesses and the organizational and functional problems, morale and culture of the company as perceived by the Management Committee

• A subjective assessment of the quality and potential of the current organization

The analysis and recommendations of M/s Price Waterhouse Coopers Pvt. Ltd. for restructuring the AEGCL under ADB’s Energy Enhancement Project in Assam has been reviewed. The recommendations made by them for restructuring AEGCL at the following levels are generally found to be OK to achieve the objectives of the AEGCL.

Figure 2 - Organisation structure at corporate level

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Figure 3 - Organisation structure at director of projects level

• Director operations

Figure 4 - Organisation structure at director of operations level

The analysis and recommendations of PWC for restructuring the AEGCL under ADB’s Energy Enhancement Project in Assam have been reviewed. The recommendations made by them for restructuring AEGCL at the following levels are generally found to be OK to achieve the objectives of the AEGCL.

1.5.2. LONG TERM PLANNING AND DESIGN

a) Long term forecasting

The annual load forecasting and long term load forecasting is not done every year, something which is required for transmission planning. The transmission system projects are highly capital incentive, requires huge capital investments and the gestation period of projects is ranging from 2 to 3 Years, and hence long term perspective plan to be prepared for mobilising the capital and identified projects

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are to be taken up for execution at least 3 years in advance to facilitate completion & commission during planned horizon year to meet the expected loads.

The load growth depends upon various factors viz policy changes and other guidelines of the government to meet specific goal (Government policies), socio economical changes in the state, which are dynamic in nature. The load forecasting made earlier may not hold good for the present and hence needs to be done every year considering the latest years data also in addition to earlier period data.

Over estimation of the loads lead to more capital investment (which will have adverse effect on finances of AEGCL). Under estimation will lead to not meeting the specified requirements (which is not desirable). Hence the load fore casting is to be done regularly every year.

The long term load forecasting to be made every year to facilitate any changes/revisions/modifications to be made for the long term transmission planning before taking up any project for execution. The long term load forecasting done by the previous consultant during the year 2006 is still being followed and annual long term forecasting is not done. This needs to be relooked / revisited by considering the peak load and energy consumption details up to 2011-12, the changed load scenarios, the policies of the GOI and GOA and the Socio Economic changes in the State.

b) Long term system planning study

The long term system planning done by the previous consultant during the year 2006 is still being followed and annual long term rolling plan is not done. The base case study with regard to the peak load of 2009-10 has been conducted. The long term system planning up to 2011-12 has been done as per load forecasting of earlier consultant / CEA 17th EPS.

The long term system planning should be done every year with reference to the base case study of the previous year and revised load projections of the long term load forecasting. Besides, the long term planning study should be revised appropriately with respect to the revised studies.

c) Transmission system designs

It is recommended to standardise the design of Towers. Standard / optimal tower designs should be developed either by AEGCL or by out sourcing (Tendering) for 400, 220 and 132 kV transmission lines for different wind Zones, Terrains, conductor sizes and Tower foundations for various soils in the state of Assam. This should be done in order to:

• To eliminate repeated type testing of towers permits usage of tower parts of one line for other

line and reduce spare requirements.

• It will make the data readily available for foundation design.

• The procurement of steel by the manufacturer/ fabricator of the tower can be done immediately

without waiting for design finalization and successful type testing.

• Foundation design can be done without waiting for design finalization and successful type testing

of Tower.

• Helps construction staff by easing construction activities.

• It reduces engineering time, project gestation period / line construction period considerably.

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The tower design testing software is to be procured and used for verifying the tower designs furnished by the suppliers for approval.

Turnkey contracts should be standardised as this reduces the time for technical and price bid evaluations and the subsequent approvals of drawings and designs.

Rigid bus type of busses should be used instead of the Strung type buses being used now. This is done in order to: reduce the bay widths, ease maintenance and improve the aesthetic look of substations

1.

In order to improve reliability, the following Switching Scheme should be adopted / designed at

substations:

• 400 kV switchyard - One & Half breaker scheme

• 220 kV switchyard - Double Main & Transfer scheme or Double Main with breaker bye pass scheme

• 132 kV switchyard - Main & Transfer scheme

Substation’s metering should be done using 0.2 Class instrument transformers and ETV. These two instruments are to be provided in substations for energy measurements and load survey data on par with ABT inter phase meters (SEM) for conducting effective substation wise Energy Audit.

d) Technical specifications of Transmission system equipment and materials

The technical specifications of transmission system equipment and materials are to be revised annually, incorporating the latest techniques and feedback from the Engineering and the Operation Services departments.

A separate committee should be formed to review and update periodically the technical specifications of all equipment and materials of transmission lines and substations.

1.5.3. PROCUREMENT, CONSTRUCTION, OPERATION AND MAINTENANCE

a) Procurement

E-Tendering should be introduced/adopted for all purchases in order to reduce advertisement costs, reduce the bid opening and closing time, reduce the time for technical and commercial evolutions, and reduce the time for placing Purchase orders.

The two part bids (Part-1-Techno-commercial and Part-2-Price Bids) are to be adopted for all the procurements (including other than ADB projects) in view of selecting the Techno-commercially qualified competent supplier/contractor for supply /execution of the project on schedule with best quality.

Other gaps which have been found related to procurement are analysed in annex VII 2. These are related to the following: Revision / Updating Technical specifications , actions to be initiated to reduce the Time for Bid evaluation and issue of LOA, Quality Assurance, System of Vendor and Sub Vendor Approvals, Manufacturing Quality Plan, Inspection, Project work schedules, Construction, Software, Field Quality Plan, Manuals, Environmental impact assessment practices and Training to field staff in construction activities.

b) Operation & Maintenance of Transmission system

The gaps which have been found are related to the following: Safety control systems, responsibilities of AEGCL, responsibilities of employees, ISO Certifications and audits, training of staff, implementation of failure Analysis Systems, of Feedback systems (SIR and ISO audits), etc.

The details of these are included as an annex (in annex VII 2).

1.5.4. REGULATORY PERFORMANCE STANDARD

Maintaining the Frequency in the 49.5 – 50.2 Hz band ensures the System Security.

1 The strung bus was being used in most of the utilities till 2000. Due to some advantages indicated below most of

the transmission utilities have adopted Rigid type bus. Hence it is recommended to AEGCL also.

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Bus Voltages are maintained between the following ranges as per the AERC guidelines.

• 220 kV - Between 198 & 245 kV.

• 132 kV - Between 122 & 145 kV.

• 66 kV - Between 60 & 72 kV

This has been possible by providing adequate reactive compensation at 33 kV level and maintaining the minimum system power factor at 0.85.

1415 km of Transmission line ground wires with fibre optic cable (OPGW) need to be provided for secured communication to SCADA. Spare pairs of optic fibre optic cables should be lent for commercial operation.

1.5.5. SYSTEM OPERATION

a) SCADA

There are about 51 numbers of EHV substations of 220 & 132 kV voltage levels. The data acquisition from 21 substations of AEGCL, all generating stations of ASSAM sate and from PGCIL sub stations in Northeastern region to the SLDC Kahilipara have been established by PGCIL about 5 years back under ULDC. The on line data is being obtained at SLDC from all these stations. The communication for this scheme is through PLCC of AEGCL and Microwave.

The work of providing SCADA for complete 51 Numbers of AEGCL EHV substations including the 21 Numbers of old substations are being carried out. The proposals of the SCADA system in AEGCL for which work is being executed are as follows:

• Establishing SCADA for transmission system in AEGCL in all the existing 51 substations, including modernization of SCADA system in 21 substations has been awarded to M/s AREVA and the work is in progress.

• About 1415 km of Transmission line ground wires are being provided with fibre optic cable (OPGW) for secured communication to SCADA and lending spare pairs of optic fibre optic cables for commercial operation. This work is under progress.

• The AEGCL will have SCADA in operation for data acquisition and substation breaker operations after completing the above works

However, there is no programme for making the all the substations unmanned to be monitored & controlled by the central station through SCADA by making circuit breakers & Isolators in all the substations compatible to SCADA operation.

b) Operating procedures:

The operations in SLDC comply strictly with CERC and AERC Grid codes, complying with the following norms:

• Maintaining the voltage levels as per the AERC guidelines.

• System security, UI mechanism and grid disciplines is maintained by providing under frequency

relays to all 132 kV feeders in AEGCL and the grid frequency always remains within the 49.5 –

50.2 Hz band.

The transmission availability is assed monthly and yearly, and it has been found that the AEGCL

Transmission availability is more than 98.5 % as per the regulatory standards.

Transmission system losses have been assessed monthly and yearly by obtaining energy meter

readings from all generators, CGS system, export to other Transmission utilities of north eastern

region, open access consumers and inter phase points of distribution company.

Interstate (PGCIL) ABT metering is functioning properly. Intrastate (with DISCOM) ABT metering has

not been provided in all the 51 substations, but is available in few substations and in progress in the

remaining substations.

There have been no major grid black outs / break downs during the last two years.

1.6. BENCHMARKING PROCESS AND STANDARDS

1.6.1. REVIEW OF NATIONAL BEST PRACTISES

The Best practices in the following National Transmission companies have been reviewed:

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• Power Grid corporation of India Ltd - North Eastern Region

• Madhya Pradesh Transmission Company - MP Transco.

• Gujarat Electricity Transmission Company - GETCO.

• Karnataka Power Transmission Company - KPTCL.

• Maharashtra State Electricity Transmission company - MSETCL

a) Transmission losses

The % Annual energy losses in various Transmission companies in the country are tabulated.

Table 4 - Energy losses (%) in various Transmission companies

Sl No Name of Transmission Utility Year % Energy losses

1 PGCIL - North - Eastern Region 2009-10 3.27%

2 MP-Transco(Madhya Pradesh Transmission company

2009-10 4.29%

3 GETCO - Gujarat Electricity Transmission company

2009-10 4.30%

4 KPTCL - Karnataka Power Transmission company

2009-10 4.20%

5 MSETCL - Maharashtra state Electricity Transmission company

2009-10 4.59%

b) Transmission system Availability:

Sl No Name of Transmission Utility Year % Energy losses

1 PGCIL -North -Eastern Region 2009-10 > 99%

2 MP-Transco(Madhya Pradesh Transmission company

2009-10 > 99%

3 GETCO -Gujarat Electricity Transmission company

2009-10 > 99%

4 KPTCL -Karnataka Power Transmission company

2009-10 > 99 %

5 MSETCL - Maharashtra state Electricity Transmission company

2009-10 > 99 %

c) Project management – Bid Evaluation:

The MP-Transco took shortest time for Bid processing, obtaining approval of Board of directors and final approval of ADB. The ADB in their Aide Memory adjudged MP-Transco as one having strong project preparation and bid evaluation capability. The table below furnishes the details of time taken for Bid evaluation and approval from Board of directors and Time taken by ADB in approval

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Table 5 - Time taken for Bid evaluation and approval

No Number

of Bids

Period for Bid

evaluation and

approval from

BOD

Number

of Bids

Period taken by

ADB for final

approval

1 7 2 weeks 3 1 Week

2 5 3 Weeks 5 3 Weeks




6 Total 31

Bids

Average Time -5

weeks

Total 31

Bids

Average Time -4

weeks

d) Project management – Completion of Transmission projects:

Special efforts have been made by MP-Transco for capacity building in project management which have resulted in the completion of all Transmission projects worth over Rs 3000.00 Crores within 15-18 months before the schedules. There has not been even a single case of time/cost overrun in any project executed in the course of past 8 years.

Special efforts have been made by KPTCL for capacity building in project management which resulted in the completion of all Transmission projects of voltage class 220 kV within 18 Months, and Voltage class below 220 kV within 12 months during last 4 years.

e) Maintenance of grid discipline as per regulatory norms:

All five Transmission companies have maintained grid discipline in terms of Frequency, Bus voltages and communication facilities.

e.1) Bus Voltages:

The Bus voltages in all the EHV buses have been maintained within the specified limits in MP-Transco, PGCIL, GETCO, KPTCL and MSETCL. This has also resulted in maintaining the% energy losses around 4.0 %. There is direct relation between the bus voltages and % Peak power, and % energy losses. Maintaining the measured energy losses in the system around 4.0% is an indication of maintaining the Bus voltages within the prescribed limits.

e.2) Frequency:

The frequency in the respective Regional grids has been maintained within the prescribed limits by adhering to:

• Providing ABT compliant energy meters at all the inter phase points

• Strictly adhering to ABT norms by limiting the drawls with the allocation all ways.

e.3) Communication facilities:

• GETCO- The Data Acquisition system (DAS) has been established in all the Substations and communication has been strengthened and reliability improved by new Motorola VHF set of latest technology, which resulted in reliable on-line Data Acquisition from all the Substations, Generating plants, inter phase points.

• MP-Transco has established a dedicated express communication network, by installing EPAX at SLD &and Sub SLDs and inter-connection through conventional 4 wires E & M Trunk Line and 2 Mbps E-1 Trunk line.

• KPTCL has established communication network covering all the substations, generating plants; inter-phase points CTU and distribution companies through V-sat communication. It is acquiring

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on-line data from all the busses of the network and planning to establish Supervisory control very shortly in order to make all the substations unmanned to be controlled by the SCADA centre at Bangalore.

• PGCIL -North -Eastern Region has established strong communication network for Data acquisition from all the buses in their system and all inter phase points.

• MSETCL also established good communication facilities for data acquisition from all the generating plants, all substation buses and inter phase points.

• System visibility to the SLD operator through SCADA and communication Mechanism is available in all 5 Transmission utilities in ensuing Real time data and Real time network analysis

f) System Maintenance:

All 5 Transmission companies posses the latest monitoring and maintenance equipment almost in all spheres of Use

• MP-Transco, with due emphasis and continuous attention towards maintenance management, has been able to attain a much higher “System availability” than the target fixed by the Honourable commission every year there by earning system availability linked incentive of Rs 75 Crores over a period of past 5 years.

• The other 4 utilities also have given due emphasis and continuous attention towards maintenance management of both substations and Transmission lines in order to comply with the provision of maintaining highest system availability more than the prescribed limits.

• Asset mapping of substation Equipment and Transmission lines and maintenance schedules for both substations and Transmission lines. They have also developed asset strategies and effective monitoring of the maintenance schedules.

• The 5 utilities carry several efficient activities related to substations’ monitoring and routine maintenance. Likewise several testing equipment is available for performing the aforesaid tasks. Detailed description of the activities and equipment can be found in Annex VII 1.

g) The manuals:

The following manuals have been developed by all 5 Transmission utilities for the guidance of the staff:

• Construction manuals for transmission lines and substations.

• Quality Assurance and quality system management procedures

• Maintenance manuals for transmission lines and substations.

• Safety procedures and safety manuals.

h) The IT Implementation and availability of software:

The following software is available in all the 5 Transmission utilities.

Table 6 - IT facilities in for-comparison Transmission Utilities

IT implementation / Software available in 5 Transmission utilities

Planning of System strengthening and System expansion wing

i. Load forecast software

ii. Tower design verification software

MRT staff Software for Relay Co-ordination

Procurement wing E- Tendering software is available with KPTCL only and not in other STUs

Construction / Execution wing Project management systems and project monitoring software

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IT implementation / Software available in 5 Transmission utilities

Maintenance staff of Transmission lines and substations

Asset mapping and management software along with GIS software

SLD i. Power system software for conducting real time load flow analysis.

ii. Software for computation of:

• TSAIDI - Average Transmission Circuit Interruption Duration Index

• TSAIFI - Average Transmission Circuit Interruption Frequency Index

• Energy Losses and peak power losses in the system.

• Computation of annual %Transmission availability.

• Total time of grid Black outs and brown outs during the year.

• Available capacity of transmission system for open access.

• Energy accounting and Energy Audit – System wise, Feeder wise, Substation wise

Regulatory affairs wing ERC and tariff failing software

1.6.2. REVIEW OF INTERNATIONAL BEST PRACTISES

a) Transmission losses:

EPRI - Electric power research institute- USA has conducted studies throughout the world in developed, developing and under-developed countries and concluded that the Power system energy losses shall be minimum of 7.0 % and maximum of 15.5% as indicated in the Table below. These minimum and maximum losses have been reached based on Techno-economical studies and the reasons are defined as follows:

• It will not be economical to bring down the losses below 7.0 % in power system. The transmission losses below 2.0% and distribution losses below 5.0%.

• The maximum losses of 15.5 % are to maintain Voltage regulations at each voltage level within the statuary limits. Out of 15.5 % the maximum transmission losses to be with at 4.0 % and distribution losses to be with at 11.5 %.

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Figure 5 - Equipment Losses according to EPRI

The developed countries, such as the European and USA have brought down the power system losses to about 7.0 % with Transmission system losses at 2.0 % and distribution system losses at 5.0%. The international level transmission losses is about 2.0%

Developing countries like India decided to maintain the maximum power system losses within 15.5 % in view of constraints in the capital investments for system improvement. Central Electricity Authority (CEA) prescribes the maintenance of Transmission system losses as 4.0% and Distribution system losses as 11.5 %.

b) Transmission system maintenance:

Red Eléctrica of Spain, the Transmission utility, has made it a company policy to draw an annual maintenance plan for transmission lines and substations in order to maintain highest transmission system availability and ensure the smooth functioning of the transport network, and preventing and reducing the Transmission unavailability of facilities.

Some of the activities covered under the annual maintenance plans of Red Eléctrica of Spain are as follows:

b.1) Treatment of corrosion protection;

These works consist of applying paint to prevent corrosion in metal structures of the lines and substations.

b.2) Cleaning of insulators

Cleaning the glass insulators of the lines is performed using either washing truck or helicopter.

b.3) Thermal Review:

The temperature of the cables, conductor connection terminals and overhead and underground lines and safety standard will be checked. In some cases, thermography is performed twice as an additional measure.

b.4) Felling and pruning of vegetation:

Cutting and pruning works are done to prevent the growth of flora under the facilities and therefore create disconnections in the lines, either the fall of trees or vegetation approach to live parts.

b.5) Live working on overhead lines –Hot Line maintenance

Red Electrica of Spain uses a helicopter and a platform attached to with the right tool to work. This method allows the company to perform maintenance without disconnecting any lines. The works involve in washing insulator, the replacement of the various elements of the lines and ground wire.

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b.6) Thermo graphic Inspections

The temperature radiated by different parts of a surface, mostly caused by warming in electrical parts in contact, is evaluated using infrared remote with a thermo vision camera. The frequency of these inspections is annual.

b.7) Facility inspections

To constantly monitor the status of equipment and systems, every month maintenance crew inspects and collects data of operating parameters of the facility. These actions, provided, further, strategy and planning further work maintenance of substations. Also, using telecommunications network itself, develop distance Reviews (Tele) to see how teams installation a snap.

b.8) Ancillary services to DC and AC

The maintenance crew also carries out maintenance work on the ancillary services in the substation, Viz A.C and DC panels, batteries, battery chargers, generator sets to keep them in good working condition. The frequency of these maintenance works is as per the manufacturer’s recommendations.

b.9) Power Transformers and Reactors

Maintenance of Power Transformers and Reactors comprises routine inspections and Tests, Tap changers inspections, measurements of functional parameters and analysis of Transformer oil.

b.10) High voltage equipment

b.10.1) Circuit breakers:

Depending on the type of switch (sulphur hexafluoride, or oil air), control type (pneumatic or hydraulic springs) and its role (Position of transformer, ballast, line, among others); perform various maintenance tasks tailored to each of them. In addition, measurements are made periodically parameters operation.

b.10.2) Isolators/ Switches, and LAs

The correct operation of this equipment is conditioned on environmental pollution in the area, which may cause problems of electrical insulation. To avoid these problems, the maintenance work are performed annually by cleaning surface coatings to remove deposits on insulators and also insulation resistance tests will be conducted

2. GAP IDENTIFICATION AND ANALYSIS

2.1. TRANSMISSION LOSSES

The year wise Transmission system energy losses of AEGCL are shown in the table below:

Table 7 - Annual Energy Losses AEGCL

Year % Energy Losses

1999-00 8.79%

2000-01 8.40%

2001-02 8.59%

2002-03 8.40%

2003-04 8.53%

2004-05 8.54%

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2005-06 NA

2006-07 6.30%

2007-08 4.31%2

2008-09 5.36%

2009-10 6.08%

Table 8 - Transmission Utility Energy Losses

The national level annual energy losses are ranging from 3.27% to 4.59 %. Thus, there is a huge gap between the national levels losses and AEGCL. There is provision for reduction of losses to about 4.0% by reducing from 6.1 %, which results in the reduction of about 96.39 MU of energy per year. There would have been annual savings of about Rs 24.1 Crores for the year 2009-10 if the Transmission losses had reduced to 4.0% from 6.1%, with BST of Rs 2.5 per kWh.

The high losses of 6.1 % might be due to:

• Some Line sections of the system are over-loaded

Or:

• The whole system is over-loaded.

• This has to be checked by the following two methods:

• Conducting load flow studies for the actual system conditions representing the generations, loads, reactive compensations and PF and identifying the over-loaded sections of the system and also voltage levels at each Bus.

• Conducting Substation wise, Transmission line wise, Energy Audit after Providing 0.2 class energy metering system (Both CTs, PTs and ETV meters) to all transmission lines, both sides of the Power Transformers in all the substations, to assess the Transmission line wise and power transformer wise energy losses and identify the high loss sections /areas.

• The most economical method of system strengthening proposals to bring down the losses to 4.0 % to be identified and executed with in schedule period to achieve the objective.

2The declared energy losses of AEGCL for the year 2007-08 are 4.31%. But in the tariff petition TandT Losses are

shown as 4.98% vide table no-3.2. It is also stated that the Energy loss to be considered for 2006-07 as 6.1 % as approved by AERC since the metering at injection points of distribution companies are not appropriate.

0%!

2%!

4%!

6%!

8%!

10%!

Transmission Utility Energy Losses!

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2.2. TRANSMISSION SYSTEM AVAILABILITY

The transmission system availability of AEGCL as furnished by them is indicated in the

below table. It has been maintained at 99% since 2007-08, but there is no systematic assessment of computation in the absence of System visibility to the SLD operator as of now.

Table 9 - Transmission System Availability

Year % Transmission

availability

1999-00 95.3

2000-01 95.4

2001-02 95.3

2002-03 95.5

2003-04 95.5

2004-05 95.6

2005-06 NA

2006-07 98.1

2007-08 99

2008-09 99

2009-10 99.42

However, after completing the work of providing1415 km of Transmission line ground wires with fibre optic cable (OPGW) for secured communication to SCADA and Establishing SCADA for transmission system in AEGCL in all the existing 51 substations, including modernisation of SCADA system in 21 substations the systematic assessment of Transmission availability can be correctly computed.

2.3. PROJECT MANAGEMENT – BID EVALUATION:

The time taken by AEGCL for bid evaluation and awarding the work is raging from 7.7 weeks (54 days) to 28.4 weeks (199 days) against the average national standard of about 9.0 weeks.

The average national standard of 9.0 weeks can be achieved by adopting E-tendering process which reduces the advertisement costs, time for technical and commercial evaluations and issuing work awards.

2.4. PROJECT MANAGEMENT–COMPLETION OF TRANSMISSION PROJECTS

The specified time for the execution and completion of projects has been specified as 24 Months from the date of issue of work award, but unfortunately none of the projects have been completed in the specified scheduled period in AEGCL against the national average standard of 18 months.

2.5. SYSTEM VISIBILITY TO THE SLD OPERATOR THROUGH SCADA AND

COMMUNICATION MECHANISM IN ENSUING REAL TIME DATA AND REAL

TIME NET WORK ANALYSIS

The same has been established in all the Transmission utilities in the country in general and in all the

5 Transmission utilities in particular.

The status of SCADA in AEGCL is as follows:

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• The data acquisition from only 21 substations out of 51 substations of AEGCL, all generating stations of ASSAM state and from PGCIL substations in the Northeastern region to the SLDC Kahilipara has been established. The on-line data is being obtained at SLDC from all these stations. The communication for this scheme is through ULDC.

• The work of establishing SCADA for the transmission system in AEGCL in all the existing 51 substations has been entrusted to a turnkey contractor and the work is under progress.

• The work of providing 1,415 km of Transmission line ground wires with fibre optic cable (OPGW) for secured communication to SCADA and lending spare pairs of optic fibre optic cables for commercial operation has also been awarded to a turnkey contractor and the work is under progress.

2.5.1. SCADA IMPLEMENTATION

• The work of providing 1,415 km of Transmission line ground wires with fibre optic cable (OPGW) for secured communication to SCADA and Establishing SCADA for transmission system in AEGCL in all the existing 51 substations, including modernisation of SCADA system in 21 substations is in progress to be completed in due course of time.

• This huge investment is proposed to be utilised by AEGCL only for Data Acquisition (DA) but not for Supervisory control (SC). Hence it is suggested to implement the supervisory control (SC) to enable all operations of breakers and isolators of all substations from the central station only and make all the 52 existing stations and proposed new substations unmanned by proper renovations of breakers and isolators to comply for SCADA operation.

• This reduces the establishment charges to a great extent. The actual benefit to cost ratio could be worked out by estimating the renovation works of breakers and isolators by individually assessing its present condition in all 51 substations

2.6. STANDARDISATION OF DESIGNS:

2.6.1. TRANSMISSION LINES:

• The standard / optimal tower designs to be developed either by AEGCL or by out sourcing (Tendering) for 400,220 and 132 kV transmission lines for different wind zones, terrains, conductor sizes and Tower foundations for various soils in the state of Assam.

• To facilitate common tower designs and foundation designs and reduces the time and cost for type tests.

• The same to be insisted for turnkey contracts also, which reduces the time for technical and price bid evaluations and according approvals for drawings and designs.

2.6.2. SUBSTATIONS:

• Rigid Bus type busses to be used against strung type buses being used now for:

o Reducing the bay widths.

o Easier maintenance.

o An aesthetic look to the substations.

• Technical specifications of Transmission system Equipment and materials. The technical specifications of transmission system Equipment and materials are to be revised annually incorporating latest techniques and feedback from Engineering and operation Services departments.

• Bus Switching Schemes:

o 400 kV - 1! Breaker Scheme.

o 220 kV Substations – Double Bus scheme (Main bus -1 and Main main-2).

o 132 kV Substations- Single Bus with Transfer Bus scheme or Double Bus scheme (Main bus -1 and Main main-2).

These actions shall not incur much higher cost but only marginally additional cost in capital

investment.

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2.7. TRANSMISSION SYSTEM MAINTENANCE:

2.7.1. TRANSMISSION LINES:

• Asset mapping of Transmission lines:

o GPS survey of the transmission line route and pasting on Geographical background map.

o Collection of required data.

o Storing in GIS software

• Outlining scheduled maintenance works:

o Trimming tree branches close to lines.

o Providing missing/stolen tower parts.

o Providing coping and muffing to tower foots where ever deteriorated to prevent corrosion of tower footings

• Hot Line maintenance:

o On-line testing of transmission line insulators for its healthiness using Hot line equipment.

o Replacement of faulty insulators by hot line equipment without availing transmission line shut downs

2.7.2. SUBSTATION MAINTENANCE:

• Asset mapping of 51 substations’ Equipment:

o The nameplate details of all the individual Equipment along with the attributes data of each equipment to be collected and mapped in GIS software.

o The SLD and substation layouts are to be developed if not available.

• Development of Asset strategies:

o Detailed maintenance schedules for each equipment to be prepared.

o Planning and attending of condition based [predictive] and Plant overhaul / turn around maintenance works.

o Schedule maintenance works to be attended, and details of the maintenance works attended as per schedule are to be keyed in to the GIS software to be viewed and monitored by all the involved parties for proper and effective monitoring of substation and equipment maintenance as per schedule.

o Life assessment tests for the old substation equipments to assess its condition & to take appropriate action either for renovation or replacement. All these information to be keyed in to GIS for regular/routine review.

• Outlining scheduled maintenance works and condition monitoring:

Planning and attending of scheduled maintenance works and condition based [predictive] and Plant overhaul / turn around maintenance works.

3. RECOMMENDATIONS AND COMPREHENSIVE FINAL ACTION

PLAN

3.1. SHORT TERM ACTION PLANS

3.1.1. EXPEDITING THE PROCESS OF SCADA WORK

The work of providing 1415 km of Transmission line ground wires with fibre optic cable (OPGW) for secured communication to SCADA and Establishing SCADA for transmission system in AEGCL in all the existing 51 substations, including modernisation of SCADA system in 21 substations, which is in progress to be expedited.

There will be no additional expenditure:

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3.1.2. PROCUREMENT:

E-tendering software and Project management software are to be procured and Project management is to be strengthened for timely completion of the awarded works without time and cost over runs.

Defining a Metering Architecture:

Measurement of the energy lost is crucial for the potential reductions plans that may happen. In this way, the company must develop a comprehensive metering architecture in order to clearly assess the areas where the losses are higher in order to develop the appropriate corrective action.

3.1.3. DEFINE A CLEAR AND ACCURATE METERING ARCHITECTURE

Ultimately, the company will require accurate measurement in order to perform the energy balances required to confirm the loss reduction activities success or to define new actions to reduce losses.

3.2. MEDIUM TERM ACTION PLANS

3.2.1. REDUCTION OF TRANSMISSION SYSTEM LOSSES:

High loss areas are to be identified by following two methods:

• Conducting load flow studies for the actual system conditions representing the generations, loads, reactive compensations and PF to identify the over loaded sections of the system and also voltage levels at each Bus.

• Conducting Substation wise, Transmission line wise, energy Audit after Providing 0.2 class energy metering system (Both CTs, PTs and ETV meters) to all transmission lines, both sides of the Power Transformers in all the substations, to assess the Transmission line wise and power transformer wise energy losses and identify the high loss areas.

• The most economical method of system strengthening proposals to bring down the losses to 4.0 % are to be identified by conducting system studies which will examine various alternate proposals and identified strengthening works to be executed with in schedule of 18 months to achieve the objective. While doing so, the forecasted load for the horizon year (after two/three years) to be considered for load flow studies.

• Capital investment to an extent of Rs 175.00 Crores (38.89 mUS$ @ Rs 45 per $) can be invested to have financial viability of the project, which will be recovered within about 6.10 years with a cost-benefit ratio of about 1.18, and interest rate of 12% on borrowings. This will not be a financial burden for the AEGCL or additional transmission charges for its customers and in turn, generates additional IRR to AEGCL after payback period of 6 to 7 years.

3.2.2. STANDARDISATION OF TRANSMISSION LINE TOWER DESIGNS:

• The standard / optimal tower designs to be developed either by AEGCL or by outsourcing (Tendering) for 400,220 and 132 kV transmission lines for different wind zones, terrains, conductor sizes and Tower foundations for various soils in the state of Assam.

• To facilitate common tower designs and foundation designs and reduces the time and cost for type tests.

• The same to be insisted for turnkey contracts also, which reduces the time for technical and price bid evaluations and according approvals for drawings and designs

3.2.3. PREPARATION OF MANUALS:

The preparation of manuals will not involve any substantial cost, but only the different committees to be formed involving experts of AEGCL in the respective fields. The reference manuals are available in all the transmission utilities in the country and guidelines issued by CEA. They have to be studied in detail and respective draft manuals must be prepared and circulated to the field staff for their comments. Comments are to be reviewed and incorporated in the final manuals after examining them. These manuals to be reviewed by the committees every 3 years and revised if found necessary. This also helps in developing in-house expertise.

The following manuals are required to be prepared for guidance to the staff:

a) Construction Practices:

• Transmission lines:

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o Manuals for preliminary survey, detailed survey using latest techniques, tower schedule preparation, locating tower positions as per the approved tower schedules, stub setting, tower foundations, tower erection, stringing and other civil works like benching and revetment

• Substations:

o Yard Levelling

o Earth mat formation

o Control room, Cable ducts, equipment foundations, roads and other civil engineering works.

o Equipment erection and Bus bar formation.

o Control and power cables schedules and Laying

• Quality Assurance and quality system management procedures

• Testing and commissioning procedures

b) Transmission system maintenance manuals:

• The maintenance manuals clearly indicating the routine maintenance inspections to be carried out along the transmission lines must be made available to each of Transmission line maintenance unit.

• Updated maintenance manuals clearly indicating the routine maintenance works on a daily, weekly, fortnightly, monthly, quarterly, half yearly and annual basis, as well as maintenance works scheduled for each equipment and duties of shift engineers in the substations must be made available to all substations and substation units.

• Safety procedures and safety manuals.

3.2.4. IT IMPLEMENTATION AND SOFTWARE REQUIREMENT:

The software indicated in the table below is to be procured. A provisional budget provision of Rs 200.00 Lakhs (0.44 mUS$ @ Rs 45 per US$) is to be made for this purpose.

Table 10 - IT Implementation / Software Requirement for Transmission system

IT implementation / Software Requirement for Transmission system

Planning of System strengthening and System expansion wing

i. Load forecast software

ii. Tower design verification software

MRT staff Software for Relay Co-ordination

Procurement wing E- Tendering software

Construction / Execution wing Project management systems and project monitoring software

Maintenance staff of Transmission lines and substations

Asset mapping and management software along with GIS software

SLD

i. Power system software for conducting real time load flow analysis.

ii. Software for computation of:

• TSAIDI - Average Transmission Circuit Interruption Duration Index

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IT implementation / Software Requirement for Transmission system

• TSAIFI - Average Transmission Circuit Interruption Frequency Index

• Energy Losses and peak power losses in the system.

• Computation of annual %Transmission availability.

• Total time of grid blackouts and brownouts during the year.

• Available capacity of transmission system for open access.

• Energy accounting and Energy Audit – System wise, Feeder wise, Substation wise

Regulatory affairs wing ERC and tariff failing software

3.3. LONG TERM ACTION PLANS

3.3.1. TRANSMISSION LOSS REDUCTION:

This is a continuous process of conducting annual Long term load forecasting, conducting the load flow studies for the horizon year projected load, identifying the most economical strengthening and expansion works system, executing them with 18 months, which will go long way in maintaining energy losses within limits of 4.0% and to reach international level of 2.5 %.

There will be no additional burden either on the AEGCL or the consumers as the capital investment will be recovered within 6 to 8 years and in turn helps the utility in maintaining the voltage at each bus with in permissible limits and generates additional IRR after payback period.

3.3.2. SCADA IMPLEMENTATION:

The work of providing 1,415 km of Transmission line ground wires with fibre optic cable (OPGW) for secured communication to SCADA and establishing SCADA for transmission system in AEGCL in all the existing 51 substations, including modernisation of SCADA system in 21 substations is in progress to be completed in due course of time.

This huge investment is proposed to be utilised by AEGCL only for Data Acquisition (DA) but not for Supervisory control (SC), hence it is suggested to implement the supervisory control to enable all operations of breakers and isolators of all substations from the central station only and make all the 52 existing stations and proposed new substations unmanned by proper renovations of breakers and isolators to comply for SCADA operation.

This reduces the establishment charges to a great extent. The actual benefit to cost ration could be worked out by estimating the renovation works of breakers and isolators by individually assessing its present condition in all 51 substations. The approximate cost may be about Rs 2500 Lakhs (5.55 mUS$ @ Rs 45 per US $)

3.3.3. TRANSMISSION LINE MAINTENANCE:

The asset mapping, GPS survey, collection of attributes data and background geographical maps of existing Transmission lines of about 4481 Ckt km may cost about Rs 225.00 Lakhs (0.5 mUS$).

One set of Hot line maintenance equipment will cost about Rs 75.00 Lakhs (0.167 mUS$).

But the benefits are enormous in enhancing the transmission line availability, which is difficult to quantify

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3.3.4. SUBSTATION MAINTENANCE:

The asset mapping of substations along with developing SLD and layouts of all the 51 substations (if not available) will cost about Rs 5.0 Lakhs (0.011 mUS$).

Appointing a committee of AEGCL officers who can study the existing manuals of other transmission utilities can do preparation of maintenance schedules in-house.

The list of testing equipment required for condition monitoring has been furnished in Annex VII 1. Some of the equipment might be already available with AEGCL. The list of remaining Equipment is to be prepared and procured, the budget provision of Rs 500.0 Lakhs (1.11 mUS$) may be made for this purpose.

3.3.5. IMPARTING CONTINUOUS TRAINING TO THE STAFF:

Training Programs

Training programs exist but need to be enlarged and systematised to enable officers and others gaining knowledge and insights, which will bring efficiency and quality in all spears of AEGCL

• Planning of System strengthening and System expansion wing:

o Long term load forecasting as per the National and International practices

o Net work modelling

o Load flow studies.

o Short circuit studies.

o Stability studies.

o Techno-economical analysis.

o Substation and Transmission line designs.

o DPR preparation and Budget proposal preparation

• MRT staff:

o System protection and Protection coordination.

o Testing and commissioning of substations.

o Routine testing of substation Equipment.

o Failure analysis of the Equipment.

o Latest trends in quality improvements of EHV SS

o Training of the MRT staff at the protection equipment manufacturer’s plant for new type of replays being supplied against the POs.

• Procurement wing:

o Preparation of Bid documents: IFB, ITB, GCC, ECC, SCC, BPS, Price schedules

o Issue of NIT.

o Technical and Commercial Evaluation.

o Issue of LOI, LOA and POs

• Construction / Execution wing:

o The Project management systems and project monitoring software.

o Construction / execution and testing and commissioning procedures in Transmission lines and substations.

o Safety procedures.

o Environmental impact assessment practices.

o Material accounting procedures at the site

o Verification of contractor's Bills and certification.

o Documentation of Approved Drawings, Test results of Equipment during Testing and commissioning, Assets and handing over to Maintenance staff.

• Maintenance staff of Transmission lines and substations:

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o Safety procedures and control system.

o Monitoring of scheduled maintenance works in Transmission lines and substations.

o Detailed procedures for:

! Scheduled maintenance works in Substations and Transmission lines.

! Asset Mapping and Asset management.

! Routine testing of substation Equipment including DGA, Earth resistance, Tan delta, circuit breakers Etc.

! RLA of substation equipment.

o Hot line equipment and Hot line working.

o Use of Thermo vision cameras.

• SLD operations wing:

o Real time power flow studies /analysis using software.

o Maintenance of grid discipline.

o Power Trading techniques

o Computation of:

! TSAIDI - Average Transmission Circuit Interruption Duration Index

! TSAIFI - Average Transmission Circuit Interruption Frequency Index.

! Energy Losses and peak power losses in the system.

! Computation of annual %Transmission availability.

! Total time of grid Blackouts and brownouts during the year.

! Available capacity of transmission system for open access.

! Energy accounting and Energy Audit – System wise, Substation wise.

• Regulatory affairs wing:

o ERC filing.

o Tariff failing,

o Complying with the regulatory directions

3.4. IMPLEMENTATION IMPERATIVES AND ENABLERS

The following action plan is proposed for successful implementation of the above short-term, medium-term and long-term actions.

a) Imparting regular Training to AEGCL staff in all its field of activity.

b) Implementation of IT initiatives.

c) SCADA implementation and SCADA operation including operation of all the substations un manned and making the system visible to the SLD operator through SCADA and communication mechanism, therefore ensuing Real-time data and Real-time network analysis.

d) Timely execution and commissioning of the proposed capital investment projects.

e) Routine and Effective maintenance of Transmission lines and substations.

3.5. RESPONSIBILITY FOR IMPLEMENTATION

The ASEB/AEGCL Management, Employees, Govt. of Assam and Regulatory Commission decide the classification for management process. The responsibility for implementation rests with all.

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Table 11 - Responsibility for implementation

Responsibility for implementation

Sl No Management of

ASEB Employee of ASEB

Regulatory

Commission Govt. of Assam

1 Preparation of roadmap for implementing all the proposals

Support and Co-operation to Management for the effective implementation

Support AEGCL for policy change necessary for implementation of the proposals including admitting additional expenditure

Support ASEB /AEGCL as a viable Business Model not as a social obligation

2 Training need identification and mandatory training policy of every employees

Attending training as per the norms and utilise the same in day to day working for enhancing the system efficiency

Necessary approval after submission from ASEB/AEGCL including additional expenditure

Support ASEB /AEGCL with additional infrastructure if required

3 Process Re-engineering and Process automation for rollout effective processes

Be involved in the Re-engineering and Automation Process and be a part of it

Necessary approval after submission from ASEB/AEGCL including additional expenditure

Support ASEB /AEGCL

3.6. PROPOSED PERFORMANCE MONITORING INDICATORS/CRITERIA

Area Performance

Measure

Effect Measured and

Frequency

Probable Data source

Transmission system efficiency

Transmission system losses

The difference between the energy in put at all the generation busses + CTU buses and energy delivered to Distribution companies at inter phase points + energy delivered to other neighbouring utilities + open access consumers.

The on-line input meter

readings obtained at

SCADA centre in SLD of

AEGCL (After completing the work of providing 1415 km of Transmission line ground wires with fibre optic cable (OPGW) for secured communication to SCADA and establishing SCADA for transmission system in AEGCL in all the existing 51 substations, including modernisation of SCADA system in 21 substations which is in progress)

Weekly, Monthly and Annually

Transmission system Availability

Frequency of Outage at inter-phase points

The on-line input data

obtained at SCADA centre

in SLD of AEGCL (After completing the work of providing1415 km of Transmission line ground wires with fibre optic cable (OPGW) for secured communication to SCADA

Duration of outages at inter phase points to Distribution companies, other Transmission companies and open access consumers.

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Area Performance

Measure

Effect Measured and

Frequency


Extent of load curtailments at inters phase points to Distribution companies, other Transmission companies and open access consumers due to transmission system constraints.

and Establishing SCADA for transmission system in AEGCL in all the existing 51 substations, including modernisation of SCADA system in 21 substations which is in progress)

Duration of restoration time

To be measured for every occurrence and weekly reports to be generated

Project management

Period of Bid evaluation

Project management software The MIS to be generated and keyed in to Project management software

period of completion of transmission projects

Monthly review

Transmission system maintenance

i. Review of Asset mapping and management software

Monthly The MIS to be generated and keyed in to GIS software to be reviewed by competent designated authority

ii. Transmission system availability during the Month / year

Monthly The on-line input data obtained at SCADA centre in SLD of AEGCL

Annual replacement of Failed equipment

Role of schedule maintenance works in Transmission lines and substations

The MIS to be generated and keyed in to GIS software to be reviewed by competent designated authority

SCADA implementation and all substation Operations through SCADA

System visibility to the SLD operator through SCADA and communication Mechanism in ensuing Real-time data and Real-time net work analysis

24X7 SLDC

Operating Un manned substations

Reduction in Establishment charges and Transmission charges

Yearly Annual Accounts

Employees per CKT KM of the system

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Assam: Capacity Development of the Assam Power Sector Utilities – Final Report – Transmission III-39

Area Performance

Measure

Effect Measured and

Frequency


Training Training man days/employee

Adequacy of training Training records

Preparation of manuals

Availability at respective unit offices and Field offices

i. Awareness of employee’s ii. Annual

Feedback from Employees

III ACCOUNTANCY AND FINANCIAL MANAGEMENT

1. AS-IS ANALYSIS, BENCHMARKING PROCESS AND STANDARDS


The As-Is-Analysis and gap analysis of the utilities’ financial management systems will examine the adequacy and effectiveness of existing processes and procedures for financial management control and accountability. It will cover the various aspects of management that are described in Section 1.4 below.


The study is focussed on organizational systems; specifically, financial and accounting, not on the financial policies and strategies of the companies which are properly the concern of their Boards and top management. The effectiveness of the latter are measured by the companies’ bottom lines or profitability while those of the former are measured by their soundness; completeness; compliance with established rules ; and consistency with Best Practices in comparable utilities with respect to the following:

• Accounting systems with special reference to their compliance with Accounting Standards;

• Management policies , planning and efficiency review process for the effective management and maximization of the utilities’ financial resources and to ensure that expenditures are within available funds;

• Accounting and financial management record keeping system for financial transactions that provides timely, accurate and useful financial reports;

• Control and Risk Management Systems to protect and take corrective steps against insolvency or fraud. This will include the delegation of authority to approve specific finance transactions; the exercise of authority such as the signing of transaction documents; ‘paper trail’ to verify the validity of transactions and the appropriate exercise of delegated authority ; and the monitoring of financial transactions; and

• Mechanisms, extent and scope of the segregation of the financial management systems of ASEB and its successor companies.

1.3. ACCOUNTANCY MANAGEMENT

1.3.1. AS-IS ANALYSIS

The As-Is-Analysis of the utilities’ accounting systems maps the current policies, processes and practices of the utilities with respect to significant accounting issues. This is primarily intended to:

• identify their gaps and shortcomings vis-à-vis the applicable national and international standards;

• assess their adequacy to provide timely, accurate and reliable information for the utilities’ policy and decision making requirements ;

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• Evaluate the adequacy of internal checks and controls for the early and timely detection of fraud, manipulations and inconsistencies in financial and operating results.

For clarity and ease of presentation, the accounting issues reviewed and the experts’ findings and observations are presented alongside each other in the following tables.

Table 12 - As-Is-analysis of accounting system: AEGCL

Subject / Issue Findings, Gaps & Shortcomings

a) Creation / Incorporation of Assam Electricity Grid Company Ltd.

b) Transmission of Electricity Legal & Administrative Aspects.

Assam Electricity Grid Company Ltd. (AEGCL) was created as a result of unbundling notification ‘Assam Electricity Reforms First Transfer Scheme (AERFTS) 2004’ on 10 December, 2004 as a subsidiary of ASEB.

The balance sheet of ASEB on 31-03-2004 was split into six newly created subsidiaries under the board. Heads of Account were not split into their supporting schedules hence the details of each assets and liabilities of the different groups have not been available since 01-04-2004. There appears to have been no attempt to split this schedules into generation, transmission and DISCOM. Thus the items in the balance sheets cannot be verified and may not be reliable.

Transmission of Electricity has been elaborately dealt in the Part V of the Electricity Act, 2003. as well as National Electricity Policy formulation under sub - section (2) of the Section 3 of the Act of 2003. It has been divided into three administrative and functional entities for:

• Inter - State Transmission.

• Regional, inter regional transmission

• Intra-State Transmission - (Transmission within the State)

One of the Transmission license holders within the state has to be named as "State Transmission Utility" (STU) and as a policy it has to be an organization under the control of State Government. In accordance with the Electricity Act 2003, an independent company or entity has to be established as a State Load Dispatch Centre (SLDC) under a State Act. The SLCD will have the right to impose levy and collect such fees/ charges as many be permitted by SERC. Until this is done SLDC will work under the STU.

GOA has yet to constitute the SLDC. It is thus presently functioning under AEGCL.

Modification / Change in the Structure

GOA modified the structure of AEGCL along with the other Companies created by AERFTS-2004. It made AEGCL an independent GOA undertaking by withdrawing capital from ASEB and providing it as capital directly to AEGCL and the other two companies. Thus AEGCL was delinked from ASEB.

The opening balances were by notified by GOA on 29 December 2007 after the audit of AEGCL for 2004-05.

Creation / Formulation of State Transmission Utility (STU)

AEGCL) was created a separate company as a result of unbundling notification called Assam Electricity Reforms Trust Transfer Scheme 2004, on 10 the December 2004. No norm / policy was Stated in transfer scheme for Debt; equity ratio. However, the Tariff orders indicate that capital issue as 70:30.

Administrative Structure

• Besides being Board of Directors& M.D & Chief Engineer (Tr) & Chief Engineer (CE) (System) the Company has 3 Circles & 12, Divisions Besides there are Design Units, which also works as Purchase Unit. There are no separate Stores Divisions.

• SLDC is a Separate unit under CE (System / at H.O. Separate Authority is yet to be constituted. (As per Section 27 of Electricity Act-2003).

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a) Accounting Setup There was no Finance Director in the Transmission Company before unbundling. While this position was created after, it has not been filled.

A Chief General Manger (CGM) who is cost accountant currently heads the accounts department. He is also the CGM of APGCL. There are three Chartered Accountants including CGM and three ICWA.

The service rules for accounting staff prescribe a minimum qualification of graduation for initial recruitment as Deputy Accounts Officer level with preference for commerce graduates and professionally qualified persons. Promotions are made on the basis of seniority. There is partial recruitment for senior manager level positions but there is not much interest from qualified persons such CA and ICWA. MBA has not been prescribed.

The prescribed level of Accounts Executives in the field are:

• Sub Division Level: Deputy AO (with two junior supporting staff)

• Divisional Level: Account Officer (with two junior level supporting staff)

• Circle Level: Assistant Account Manger - 1, Accounts Officer - 1, Deputy Accountants Officer - 1, with two supporting staff to each.

• Zonal Level: Senior Accounts Manger - 1, Accounts Officer - 1, Assistant Accountants Officer - 1 with two supporting staff each.

At Corporate Level the work has been divided into various functional areas. These are manned by appropriate level executives and supporting staff.

b) Sectional Journal System of Primary Books ( Cash Book, Journal & General Ledger) are replaced by Sectional Journal Method

There is no awareness of the need to maintain sectional journals and their importance in internal control, the early detection of mistakes and in facilitating the accounting of cash.

c) Capability of Accounting System of doing Exceptional Tasks, Generation Specific Data for Management Use in a systematic manner

The current system is not capable because :

• Accounts are still largely prepared manually and are thus prone to human errors;

• Management tendency to ask for the same data in different formats;

• While primary data is available to generate financial/accounting information for different purposed; the information required is prepared in a subjective manner.

• Control / Secondary Books of Accounts are not maintained at the primary Accounting Centres.

d) Custody of Accounting Records

There is no record room for the custody of accounting records at Head Office. Maintenance of a record room is standing and standard practice and is also required in the State Government rules on the maintenance of records. Income tax rules also require 15 years life for accounting records.

There is some record keeping arrangement at Sub Division, Division & Circle level.

i) Compliance with Indian Accounting Standards compatible with schedule VI of the companies act 1956,

Violation of Accounting Standards (AS) is a serious problem. The Statutory Auditor has made qualified reports that following Accounting Standards have not been complied with.

The Statutory Auditor of AEGCL has made Qualification for year 2008-09, that following Accounting Standards have not being complied with:

• AS-1: Disclosure of Accounting Policies

• AS-2: Valuation of Inventories

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• AS-5: Prior Period Items

• AS-6: Depreciation Accounting

• AS-9: Revenue Recognition

• AS-10: Accounting for Fixed Assets

• AS-12: Accounting of State Govt. Grant and Asian Development Bank

• AS-13: Accounting for Investment

• AS-15: Accounting for Retirement Benefits

• AS-16: Borrowing Cost – Interest

• AS-22: Accounting for Taxes on Income

• AS-28: Impairment of Assets

• AS-29: Provisions, Contingent Liabilities and Contingent Assets

• AS-30: Financial Instruments: Recognition and Measurement

ii) Convergence with International Financial Reporting Standards (IFRS)

AEGCL has no internal competence to make a switch over from Indian Accounting Standard to the more complicated IFRS.

India’s Institute of Chartered Accountants of India (ICAI) has declared adoption of IFRS from financial year 2011-12.

The Government of India will notify the accounting norms for the switch to IFRS by the end of Dec 2010 which shall be applicable from 01-04-2011. This timeline may be moved to 2012-13. All 37 Standards has to be notified as fully compliant with IFRS convergence guidelines and shall apply to all companies with net worth of Rs. 1000 Crores and above. For other companies it will be notified later.

Accounting Issues

i) Computerization & Unit Accounting

Every power plant is a primary and complete accounting unit.

Monthly Accounts are required to be sent and are regularly submitted to Head Office. But there is no regular monitoring to ensure that monthly accounts are submitted according to schedule. There is no monthly consolidation at Corporate Office.

Accounts are consolidated yearly but there is no transfer of balances.

Accounting in AEGCL-field units and at head office is computerized. However, as commented on by CAG, accounting processes and codes are not uniformly followed.

ii) Head Office Expenses

There is no system of allocation of H.O expenses to units in a fixed ratio.

H.O Account are kept independently while expenses are met out of funds primarily controlled by H.O. HO annual accounts are merged with those of the Units as corporate final Accounts.

The system lacks accountability of H.O for its expenses as it does not involve any upper limit for H.O expenses except through the budgeting system.

iii) Share Capital AEGCL came into existence on 01-04-2004 but share capital has not yet formally been allotted to GOA as shareholder as required by the Companies Act-1956. It still appears as Share Deposit (Rs. 99,88,18,606 on 31-03-2009). This delay is abnormal. Government has right to recall the Share Deposit. No norm / policy was Stated in transfer scheme for Debt; equity ratio. In addition, the authorized capital of the companies is less than the amount of Share deposit hence, they need to be suitably increased including for future investment in Share Capital.

The AERC in its Tariff order for 2008-09 and 2009-10 directed AEGCL to: "Increase the Authorized Share Capital to covert a Share Deposit into issued

subscribed and Paid up Capital"

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iv) Reserves and Surplus (Schedule-2)

Particulars and nature of reserves are not clear and details have not been given. There is inadequate disclosure which is a violation of the norms of disclosure.

The Audit Report also stated that Accounting Standard (AS) 12 on government grants was not complied with. The amount involved was Rs. 9.7 Crores.

v) Loan Funds - Unsecured Loans

The following loans are being classified as unsecured which seems to be wrong for the reasons given below.

• ADB Loan. Govt of India & State Govt. provide collateral guarantees and the latter assumes responsibility of repayment hence it is fully secured.

• State Govt. Loan; ASEB / APGCL must have given counter guarantee.

• GPF Balance: It is not a Loan but employees’ accumulated fund of GPF which as per GOA GPF rules carries Govt guarantee. It should have been classified separately as Funds.

Assets not in use Or Abandoned / Decommissioned

There is quite a high value of such assets. Quantification is not possible because AEGCL is in the same position as APGCL where the absence of a fixed asset register has prevented the segregation of fixed assets in use and idle fixed assets.

The failure to segregate and account is a violation of AS-18. The company retained the services of a consultant to segregate the assets and to create Fixed Assets Registers. The Fixed Assets Registers have been completed up to 2007-08.

In relation to this issue, the regulator had directed AEGCL to "File Physical

Verification Report of Fixed Asset by a competent and reliable Authority".

a) Category wise Breakup of Fixed Assets.

The breakup is too broad and is not an adequate disclosure. The category wise breakup of fixed asset has been prescribed in Electricity (Supply) (Annual Accounts) Rules-1985, which is still valid as covered under savings clause (Section-185[2] [d]. This requires a transmission utility to disclose voltage wise assets i.e. 400 KV - feeders and sub stations s/s, 200 KV feeders and s/s and 132 KV feeders and assets as well as control and monitoring related assets.

Compliance with the prescribed guidelines for category wise breakup may not be possible at this time because of the lack of complete and updated asset registers. Compliance with Accounting Standard cannot be established.

The AERC had directed the company to "Submit analysis of Capital Work in

Progress year wise beginning from financial year 2005-06 to 2008-09" and to "Capitalize Capital Work in Progress after obtaining physical completion

certificate along with financial completion certificate".

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b) Capital Work in Progress

Capital work in progress in the power utilities is always substantial and continuing. The system of classifying the expenditure to this head is on the basis of project report. The system of conversions of capital work in progress is also fully established but has not to be followed. This consists of: (1) preparation of closing Project Report; (2) allocation of general, common & administrative expenses on the creation of fixed assets, and (3) deciding the date for putting it to commercial use.

AEGCL does not appear to have an institutional mechanism for the classification of CWIP and timely action had not been initiated either by engineering or accounting department leading to lower depreciation and non-disclosure of this important data. In this regard, the Statutory Auditor have pointed out that the CWIP register showing details of completion is not maintained and capital categories as asset in the amount of Rs. 449.71 Crores in 2008-09 could not be verified. The regulator had also directed the company to "Submit analysis of Capital Work in Progress year wise beginning

from financial year 2005-06 to 2008-09" and "Capitalize Capital Work in

Progress after obtaining physical completion certificate along with financial

completion certificate".

c) Depreciation on Fixed Assets

In the absence of shift log Book for Plant & Machinery, (Feeder & S/S) depreciation on Plant & Machinery has been charged (even assets not in use) on continued process Plant basis. Also, in the absence of Fixed Assets registers, depreciation is charged on the "Gross Value at any given time and as such the depreciation is charged even on the assets whose gross value might have already stood fully depreciated".

These are serious violations of Accounting Standards as well as of the terms of the Generating License issued by the AERC, the Electricity Rules and of the Standard performance of power stations. This also makes operational data unreliable and the cost of transmission incorrect.

Section 205 of the companies Act, 1956 provides guidelines for the depreciation of idle assets if they are not discarded and not held for sale. Idle Assets that are used as standby equipment in emergencies have to be depreciated. Depreciation cannot be charged for those that have been retired from active use.

In case of revaluation AS-10 provides that depreciation could be provided on re-valued amount but requires that the difference of depreciation on revaluation portion has to be debited to Revaluation Reserve. But there is no case of revaluation in AEGCL.

viii) Lien on Assets Not Separately disclosed. Its disclosure is mandatory as per schedule VI of the Companies Act-1956. Some of the assets like transmission lines and substations have lien against loan form funding agencies.

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Stores and Spares a) Schedule -6 to the Balance Sheet)

The company does not maintain separate Stores Divisions. All Stores of related feeders and sub stations are maintained at s/s. During interviews it was indicated that most of the Capital Stores are provided by contractors and per the terms of the contract. But the Balance Sheet does not support this. The closing balance of Stores on 31-03-2009 was Rs. 32.79 Crores.

As of 31-03-2009 there was Net shortage of Rs. 26.67 lakhs that has been pending investigation for long period. No change in the amount is reflected to indicate that physical verification was carried out.

There is no Store Manual. Issues are based on yearly fixed rates except for Capital Stores. Difference at the end is adjusted thru Stock Adjustment Account. The Stores account does not include "Scrap" which may be substantial which makes them prone to theft and pilferage.

The closing balance of inventories as of 31-03-2009 was Rs. 747.56 lakhs while physical verification reveals stock of Rs. 311.78 Lakhs only i.e. less by 41.75% of the total inventory. There is a gap of Rs. 435.78 lakhs, which is net shortage because the shortage & excess both pass through the same accounts where part of the excess automatically reduces the shortage by the same amount. This situation could lead to pilferage or covering of shortage. The exact position can be ascertained by an in-depth review of the physical verification reports which are quite voluminous.

The wide gap between the inventory closing balance and physical verification requires a thorough investigation, which has not been conducted. The gap may have been due to large-scale theft or pilferage; unscientific and wrong valuation methodology or gradual depletion of stock.

The physical verification of stores/stock does not include capital stores and metering equipment. Physical Verification is under the Control of Engineering Department with the assistance of Accounting. But Financial Accounting responsibility lies on Accounts only.

ABC analysis is done on Power House Inventory only.

b) Capital Spare Parts & Stores

In every Capital and Physical intensive organization where plants and equipment having long life are procured, there is a separate system of procuring capital spare parts and stores with the main equipment which are generally in the nature of insurance items and are stored separately. Accounting is done differently for such items.

c) Physical Verification of Assets & Stores

As of 31-03-2009 there was Net shortage on stores of Rs. 26.67 lakhs that has been pending for investigation for a long time. The net shortage indicates the difference of excess and shortage. This could lead to pilferage of excess stock to the extent of the understatement of the shortage.

Non-Adherence to the system of physical verification is a serious shortcoming. Audit had pointed out that the Balance of Store ledger has not been reconciled, with the Physical Balance since 2005 and there are Material discrepancies in Physical verification.

The report on the fixed assets is not reliable because a fixed asset register is not maintained.

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Inter Unit A/c. Including Material Transfers to other Units.

Accounting wise, Inter-Unit A/C at H.O should ideally show a nil Balance. Instead, there was a huge Balance as of 31-03-2009 which is an indication that Debit Notes raised by H.O on the units were not responded timely. Some time there is a variation without intimation to transaction originating unit. Duplicate copies of debit notes are returned very late. As such there is always a difference in the debit raised and cleared by Credit by receiving unit.

The accumulation of huge amounts as Debit in Inter - Unit Account and at corporate levels provides an easy route to fraud and a convenient cover for the shortage of cash or material. This is a serious lapse in accounting practice that needs plugging.

Inter-Unit Account for Cash Transfer form H.O / Unit to Head showing a Debit Balance indicates negligence especially when transfers are also possible through internet.

Schedule-24 Statement of Accounting Polices

a) Depreciation Method

Straight-line method has been adopted. It complies with Accounting Standards and schedule - VI of the companies Act. The Electricity Act-2003 authorizes the CERC/SERC's to prescribe the life of different assets and rates of depreciation for the Generation, Transmission & Distribution utilities which is also allowed by the Companies Act.

Sundry Debtors (Receivable)

Receivable is not a problem in transmission utility as its debtors are restricted to Govt. DISCOMS only. There is no possibility of these becoming doubtful or bad.

Wheeling charges to open access and other consumers outside Assam are collected in advance thru RLDC.

The accounts receivables are not aged. There are no doubtful or bad debts.

Internal Audit The company has an internal audit system but it is not commensurate with its size and nature of business. The statutory Auditor had also adversely commented on it. There is no regularity and system of internal audit and there is no internal audit manual. (As observed in Audit).

Statement on overdue bills and provision of interest on such bills of Micro, Small and Medium Enterprises.

The Micro, Small & Medium Enterprises Development Act, 2006 (MSMED) requires every Company to pay the Bill of MSMED within 30 days or as per agreement. It also requires companies to disclose the outstanding amount of bills pending beyond 30 days on the date of Balance Sheet as well as amount of interest which is payable as per above Act, at 3 times of bank rate on monthly rest. Violation of the Act is punishable. No such disclosure has been made in the notes to Accounts which could be a violation of the Act.

Accounting Documents

There is no separate Accounting Hand Book for use by a new comer. But chart of Account is available.

There is no institutional system of keeping the revision of Accounting system updates as per changes and keeping the staff in the field aware of new changes as well as for testing their level of awareness.

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a) Method of Classification of Expenditure of durable without creation of Asset, as Capital or Revenue or deferred Expenditure.

There are many works / projects in the nature of Capital maintenance, Refurbishment, Renewals, capacity addition, rehabilitation of existing Assets having long term benefits. However, there is no institutional system for classifying such expenditures into capital and revenue.

Works/projects of this nature are generally classified into revenue funding or capital funding for provision in the Budget. Accounting hence, booking is supposed to be guided by the same. Whether or not this is followed in practice, is still a matter for detailed investigation. Although there is sufficient awareness of this method, field practice is not clearly known.

b) Project Monitoring The Comptroller and Auditor General of India (CAG) had observed that the company uses PERT & CPM Technique for monitoring the progress of capital works. But PERT / CPM is employed at the time of project formulation but is never updated and is hardly used for monitoring.

The degree of time and cost overruns is alarming.

Ideally the company should analyse the time and cost overruns and disclose these in the detailed Notes to the Accounts. The analysis should follow the Government of India Guidelines for the categorization of overruns as follows:

• Cost increases due to time over run-cost of manpower

• Cost increase due to the upgrade of technology of equipment products and process

• Cost increases due to upward Revision capacity

• Cost increase due to change in foreign exchange parity

• Cost & Time overrun due to administrative delays as (1) controllable delays (2) non controllable delays like acquisition of land etc.

• Other reasons

Annual Accounts & Statutory Audit Report.

As per Companies Act, 1956. Annual Accounts are required to be finalized. Audited and Adopted by Annual General Meeting of the shareholders by 30th Sept every year. Annual Account for 20008-09 is yet to be adopted while those for 2009-10 are yet to be finalized.

No Annual Accounts can be adopted by AGM without audit report by the Statutory Auditor, under the companies Act-1956. Reports by management on action taken on qualifications in audit reports, are required to be placed before AGM.

Follow up Action for next year is almost missing and as such qualification in the audit reports are repeated again and again.

Cost Audit No cost audit is prepared as it is not yet mandatory.

a) Internal Control System

Large companies such as AEGCL should have built in internal control system of automatic counter check of the accounting and documents. This is done to a very limited extent at AEGCL.

Internal Audit is just one aspect of such an internal control system which in itself is ineffective.

b) Internal Control (Procurement System)

System of requirement, procurement, tendering & approval by tender committees is well defined. They vary according to the value of the tender / contract and delegation of power to the concerned executive.

Designing, quality control and testing parameters are done by Design and inspection unit.

Payment of Bills systems is also well specified.

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c) Introduction of Profit / Cost / Investment / Accountability Centres

The company has not considered the possible introduction of profit/cost/investment/ accountability centres. The lack of interest may be due to the difficulty of fixing the transfer prices of energy and/or other common services.

d) Measurement of Efficiency & Effectiveness of Accounting System

There is no existing mechanism to measure the efficiency and effectiveness of the accounting system.

Repeated audit qualifications and AERC directives for the company to address certain deficiencies indicate weakness in the present system.

Follow up of Audit objections

There are three types of Audit Objections. These are:

• Internal Audit- This is practically missing except to some extent, of revenue divisions. In case of APGCL there is no Internal Audit wing.

• Statutory Audit- under companies Act-1956. No. of Audit Para’s are recurring year to year because there is no institutional system of compliance and follow up.

• Proprietary and Special Audit and Reviews by CAG (highest constitutional audit authority public fund) - However, the coverage of CAG Audit are decreasing every year.

CAG had commented that compliance is poor and some of the compliances require major changes. Some of the issues are too old hence, compliance is not possible. These shortcomings will pose serious problems when IFRS is adopted.

Formation of Audit Committees

According to the Companies Act-1956, every company must constitute Audit committees of the Directors to work and review all audit parameters and reports and also conduct special investigations. However, no action has been taken to comply with this requirement.

Placement of ASEB / AEGCL Annual Accounts before State Legislature

ASEB is a Statutory Organization of GOA and as such its Annual Accounts are required to be placed before the State legislature. CAG commented that the Annual Accounts for the years 1996-97, 2001-02, 2002-03, 2003-04,2004-05,2005-06,2006-07 and 2007-08 (8 years) have not been placed before the legislature. This is a serious technical and Constitutional lapse.

Reconciliation of Opening Balances on the effective date of Unbundling 01-04-2005

Since AERFTS-2004, only the segregation of the main Heads of Accounts in the six parts pertaining to six different Units which came to existence were reportedly undertaken, leaving the opening balances in the new companies duly reconciled with closing balances of erstwhile ASEB. Moreover, the opening balances taken are also reportedly yet to be reconciled with the segregated group balances shown in the unbundling order. In case the situation is otherwise, done the three companies should provide certificates because it is not possible to countercheck the status of this issue in the survey.

Bank Reconciliation of Cash Book (Payment) & Cash Book Revenue with the bank at primary disbursing and Accounting units and collection of revenue at the revenue Sub-Division as well as at Corporate level.

Formats have been provided and reconciliation is generally regularly done. The final reconciliation at the end of March takes more time because the adjustment of pending interest, bank charges etc., is done by the bank.

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Authorization of Entitlement of Personnel Payments

The authorization to Executives (Assistant Account Officer & Above) are: (i) For monthly payment of salary - increment etc., (ii) Earned leave & encashment and other paid leaves, (iii) Arrears if any. These are authorized centrally by Pay & Accounts wings of corporate office and for local TA etc. by Accounts Units at the place of posting as per the rules applicable to the concerned officer.

Executives are Self Billing employees while in certain units the office prepares the Bills. For other staff, attached establishment units of the concerned office based on orders applicable draw Bills.

A Register called Employees Earning register, of entitlement and other personnel payments, deductions and such other related details are maintained separately for each executives and employees. This register is kept in record for entire duration of the employees’ service.

Accounting for Pension & Gratuity

There is a separate ASEB Employees Pension Fund Investment Trust (PF Trust) since 1993. The Trust is responsible for the payment of pension to retired employees as per the rules.

The Companies make monthly contribution to the Trust based on the actuarial valuation of contribution and fixed by the Trust, which also maintains the GPF Account of the Employees whose amount also transferred monthly to the trust.

The Trust is supposes to make the payment directly to the pension holder. But in practice the payment of pension is made by respective companies and adjusted from the monthly contribution. The net amount is transferred to the Trust and similarly GPF payments are also dealt in the same manner.

Banking System & Accounting

Reconciliation of Cash Book with Bank Account is done regularly every month at primary Accounting & Disbursing Units and at Corporate office. It is controlled and monitored by a separate Bank Accounting cell.

Revenues collected in field units are transferred daily to the Corporate Office revenue account. A monthly reconciliation statement is prepared to counter check the credit posted by the Bank.

H.O releases fund to field Accounting & Disbursing Units for expenses taking into consideration budgetary provisions and availability of funds in to account. Transfers are made by Banks on t he basis of release order. But in case of revenue transfer the Banks as per the standing orders does it automatically.

System of Bank Guarantees, Release, Encashment etc.

Bank Guarantees generally expire on due dates whether returned to the Bank or not unless extension is given. However, since the release of the Bank Guarantees depends on fulfilment of certain conditions like warranty period etc. The actual return of Bank Guarantees to the Banks takes longer time.

Bank Guarantees remains in the custody of the Nodal Office of the work for which Bank Guarantees was taken.

Taxes on Income Companies are assessed for Income Tax. All returns are filed regularly and timely.

The tax assessment up to 2006-07 has been done. Assessment for 2007-08 and 2008-09 are in process.

No appeal or dispute is pending. No advance Tax is paid. No MAT (Minimum Alternate Tax) is paid because there is no Book profit.

TDS is deducted from the payment as per TDS rules and deposited with the Tax Department.

Sales Tax / Trade Tax / Service Tax / VAT

Units are independently registered. There is no centralized registration payment or assessment.

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Adaptability of New / Modified Accounting system

It can be adopted if introduced and training is provided (this does not refer to the switch over to IFRS for which is there is no competence in the system).

Conflicting order on Accounting Issues

Not a serious problem.

Maintenance of Subsidiary Books

Not even 50% of the required books are maintained. But it was in the general opening that many subsidiary ledger / record were prescribed. This needs to be rationalized by early computerization.

Flow of Accounting Data

Units send monthly accounts such as the monthly trial balance and statement of account and prescribed returns regularly to H.O. There is no regular information/data submission requirement for managerial decision-making purposes.

Accounting for capital stores

Capital stores are capitalized with the projects. Quantities of those in stores are recorded and are issued without indication of values. There is no problem in the accounting of capital stores in Transmission and Distribution.

Departmental Action against the Defaulting officers Inducted by CAG

Not taken and generally showed ignorance.

Cash Vs. Accrual Accounting

Expenditures and revenue are recorded on accrual basis.

Accounting Application Committee & quality Circle for Accounts

The AERC has discussed the need for quality circles. At the same time there is also a need for a standing Accounting Application Unit at the H.O. These could be considered when conversions to IFRS are undertaken.

Resolution of Problems

There is no Institutional Mechanism for problem resolution. However it is normally done by phone.

Meeting of Accounts Executives

There are no such regular meetings. Meetings are held on specific issues at zonal and H.O.

O&M Methods Operation and maintenance is performed either internally by the concerned departments; or externally by contractors and/or agents.

Name and Address of Statutory Auditors

U C Majumdar & Co.

Chartered Accountants

Firm Regn No. 304066E

Guwahati Assam

Problematic Area of Accounting

• Inter-Unit reconciliation.

• Reconciliation of Opening Balances on the date of unbundling.

• Non Write-Off of dead assets not in use or abandoned due to non-availability of Asset Register.

• Lack of physical verification of assets.

• Non Write- off of shortage and excess found of physical verification as the administrative procedure for write-off is difficult and lengthy and accountability is required to be fixed on defaulting officers.

• Delay and non-compliance of Audit Para's due to delayed detection of

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mistakes.

• Untrained staff.

• Lack of guidance of accounting problems.

1.3.2. BENCHMARKING PROCESS AND STANDARDS

Consistent with the objectives of this Study, the following benchmarking criteria were adopted for the selection of the Best Practices of comparator utilities:

• Full Compliance with all Accounting Standards, and with the Indian Generally Accepted Accounting Principles (GAAP) subject to allowable deviations where they apply;

• Installation of an effective Internal Audit System;

• Installation of an effective Internal Control System and one that is linked to the financial management functions;

• Constitution of the “Audit Committee of the Board of Directors” as required in the Companies Act;

• Availability and adequacy of accounting Hand Books, Guide Books, Manuals, Standard Formats for the preparation of reports and information and communication Equipment to facilitate reporting such computers and access to office e-mail for management and staff;

• Regularly updating of Accounting Primary and Subsidiary Control Books;

• Timely Reconciliation of all Control Books with consolidated Control Account;

• Responsiveness to change such as but not limited to plans for the migration to IFR;

• Sustained capacity building of the staff and hardware for enhanced reliability, transparency and dynamism.

a) Comparator Utilities

Two power utilities (I national and 1 State Electricity Board) were selected for their Best Practices covering all the aspect enumerated above except for migration to the International Financial Reporting Standards (IFRS) which are still in transition.

a.1) National Thermal Power Corporation (NTPC Ltd)

NTC Ltd has 25 power stations that are primarily thermal- oil and coal based with over 30000 MW installed Capacity. (It is a Navratna – one of the Nine Jewels of Public Sector) with global presence in the Thermal Power Houses. It is also a central Pool to assist States State Electricity Boards and power companies.

a.1.1) Human Resource Management

Company takes pride in its highly motivated and trained manpower that has substantially contributed to bring the Company to its present strong position. The Company strongly believes in achieving organizational excellence through human resources and follows a “People First” approach to leverage the potential of its employees to realize its business plan.

a.1.2) Training and Development

In consonance with the corporate vision of being an “integrated power major”, the Company facilities the development of all-round competence of its people in new business areas like mining, hydro, nuclear, distribution and other facets of operation , maintenance and project execution skills. The Power Management Institute (PMI) is NTPC’s apex training and development centre providing planned as well as need based programmes in technical, managerial and information technology areas both for NTPC employees as well as for other organizations.

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a.1.3) Environment Management

The Company is taking a number of initiatives towards preservation of all elements of environment by providing state-of-the art pollution control system, strict environment monitoring, judicious use of natural resources (coal, gas, water, and land), as well as being undertaking studies on the environmental impact of plant operations and the like.

a.1.4) Cost Audit

The Cost Audit Reports for the year 2005-06 were submitted for the first time to the Cost Audit Branch in August 2006.

a.1.5) Risk Management

In order to reduce dependence on conventional fuel, the Company is foraying into hydro, nuclear and non-conventional energy sources. As a step in backward integration, the Company is also entering into coal mining business and also natural gas value chain.

a.1.6) Internal Control

Company has a sound system of Internal Controls for financial reporting of various transactions, efficiency of operations and compliance with relevant laws and regulations. Suitable delegation of powers and guidelines for accounting has been issued for uniform compliance. In order to ensure that all checks and balances are in place and all internal control systems are in order, experienced firms of Chartered Accountants in close co-ordination with Company’s own Internal Audit Department conduct regular and exhaustive internal Audits. The Committee on Management Controls periodically reviews important findings of different Audits and closely monitors compliance with the Internal Control System.

a.1.7) Committees of the Board of Directors

The Board has established the following Committees:-

a) Audit Committee.

b) Shareholders / Investors Grievance Committee.

c) Committee on Management Controls.

d) Contract sub – Committee.

e) Project Sub – Committee.

a.1.8) Code of Conduct

The Board of Directors has laid down two separate Codes of Conduct – one for the Board Members and another for Senior Management Personnel. These are aligned with the Company’s Vision of ethical and transparent management.

a.1.9) Whistle Blower Policy

The Company has adopted a “Fraud Prevention Policy” which provides for a Whistle Blower mechanism for the reporting of fraud or suspected fraud involving employees of the Company as well as representatives of vendors, supplies, contractors, consultants, service provider or any other party doing any type of business with NTPC. All reports of fraud or suspected fraud are investigated with utmost speed. The mechanism for prevention of fraud is also included in the policy.

a.1.10) Energy Audit

Regular in-house energy audits in the areas of auxiliary power consumption, water balance, cooling water system, compressed air, coal handling plant, MGR, Lub Oil System, Air Conditioning, Ash handling system, GT Compressor, GT open cycle efficiency, lighting, WHRB performance etc.

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a.1.11) Auditors’ Report – Aspects of Efficacy of Accounting System

• “We conducted our audit in accordance with Auditing Standards generally accepted in India.

Those standards require that we plan and perform the audit to obtain reasonable assurance

about whether the financial statements are free from material misstatements. An audit

included examining, on test basis, evidence supporting the amounts and disclosures in the

financial statements. And audit also included assessing the accounting principles used and

significant estimates made by the management, as well as evaluating the overall financial

statement presentation. We believe that our audit provided a reasonable basis for our

opinion.

• We have obtained all the information and explanations which to the best of our knowledge

and belief were necessary for the purposes of books;

• In our opinion, proper books of account as required by law have been kept by the company

so for as appears from our examination of those books.”

Annexure to the Auditor’s Report:

• “The company has generally maintained proper records showing full particulars including

quantitative details and situation of fixed assets.

• All the assets have not been physically verified by the management during the year but there

is a regular programme of verification which, in our opinion, is reasonable having regard to

the size of the company and the nature of its assets. No material discrepancies were noticed

on such verification.

• Substantial part of the fixed assets has not been disposed of during the year.

• The management at reasonable intervals has physically verified the inventory.

• The procedures of physical verification of inventories followed by the management are

reasonable and adequate in relation to the size the company and the nature of its business.

• The Company is maintaining proper records of inventory. The discrepancies noticed on

physical verification of inventories, wherever material, have been properly dealt with in the

books of account.

• We have broadly reviewed the accounts and records maintained by the company pursuant to

the Rules made by the Central Government for maintenance of cost records under section

209(1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the

prescribed accounts and records have been made and maintained. We have not, however,

made detailed examination of the records with a view determine whether they are accurate

and complete.”

a.2) Uttar Pradesh State Electricity Board & 8 Successor Companies

a.2.1) Management of Float in Cash Movement

1. (a) The main Cash Book in Head office is based on the actual transactions in the Bank. The bankers of the Board and successor companies keep two accounts, one for crediting receipts from field units and second for expenses.

(b) The senior person from H.O collects the information from Banks & all Credits / transfer received is accounted for in Main Cash Book. The Balance received in Receipt Accounts are automatically transferred to Payment Account which is are in turn transferred, as per standing arrangement, to Payment Account of the Main Banker.

(c) All cheques are drawn on the main banker and are taken up in the cashbook on the basis of cheques presented to the banker.

(d) The SEB and its successor Companies have a bank overdraft facility for float management. The bank overdraft account has fully been utilized. The daily balance in the Main Payment Account of the day is transferred to this account and restored back to the main Payment Accounts. Thus no balance is left in the Bank Accounts of any banker while the overdraft account is cleared and restored every day ensuring full float utilization.

2. There are more than 500 Units where disbursements are made from the Payment Accounts to which funds are transferred by H.O. Receipts are credited to the Receipt Accounts and remitted to H.O daily / 3 times a week. No mixing up is allowed. There is a standing transfer to each disbursing unit for monthly pay and salary by its main branch at H.O. At the same time, there is arrangement with over 100 such units where a fixed amount is credited by the Banker to the Payment Account of the unit on the 1st day of every month and debited in its main Branch at H.O with the similar amount. This avoids the “Float for 10 Days” in transit.

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Majority of bankers have yet to introduce E-transfer thus float of few hundred cross every month is eliminated and fully utilized.

3. In the case of the Generation Company, there is a daily requirement fund. Arrangements are in place for daily fixed amount credit in Unit Accounts and debited at the Main Branch at H.O. Additional funds are provided by transfer as required.

a.2.2) Introduction of Section Journal System

The “Sectional Journal System” was introduced by UPSEB. The main classification of the cash expenditure is done through the following three sectional journals:

1. Salaries and Wages Journal (SJ-1)

2. Other Establishment Expenditure and Miscellaneous Payments Journal (SJ-2)

3. Other Payment for Stores & Services, etc. Journal (SJ-3)

All the payments relating to the salaries and wages, ex-gratia and overtime, and the like pass through the Salaries and Wages Journal (SJ-1), while all other payments to staff, like travelling allowance, conveyance and medical reimbursement, travelling allowance advance, advance for pay and contingent charges pass through Other Establishment Expenditure and Misc. Payments Journal (SJ-2). All other payment-vouchers are classified and pass through the Other Payments for Stores and Services Journal (SJ-3). In the new accounting procedure, the main classification of the expenditure will be done through Sectional Journal and as such the payment once entered in any of the Sectional Journal will be included in month’s expenditure though the vouchers may be held up for payment with Cashier for want of funds, etc.

The erstwhile U.P State Electricity Board introduced the system of disbursement of salaries & wages to staff though banks. Under this system the employees whose claims are drawn through a bill are required to open a Savings Account with the Bank and the cheque for the net amount payable to these employees is issued in the name of the Bank with the instructions to credit the proceeds of the same to the Savings Accounts of the individual payees as per Statements enclosed. The disbursement is, however, shown in the Cash Bank of Salaries & Wages of Staff (Form 2) and acknowledgement of individual employees continues to be taken up on the Acquaintance Roll as usual.

The function of the Divisional Accountant with regard to disbursement of salaries & wages is just limited to that of the Treasury Officer. That is, he is not concerned with the disposition of the amount transferred to the Cash Book for Salaries & Wages but will, however, continue to scrutinize them at the time of his periodical inspection of the sub-division.

At the close of the month’s transactions, the total debits and credits under various heads of accounts from all five sources, i.e. sectional journals 1, 2, 3 & 4 and Main Cash Book are compiled in a register which is called ‘Consolidation Register’. There is no need for preparing the cash outlay for the purpose of monthly account as the Consolidation Register already serves the same.

a.2.3) Internal Audit – Outsourcing

Internal Audit in most of erstwhile State Electricity Board and its successor Companies was not an effective tool for Corporate Governance mainly because was neither independent nor its scope of functions specially laid down. The function of an “Internal Audit” could not be under narrow limits but all-inclusive depending upon the perception of management. In SEB’s internal audit unit was a unit of Finance & Accounts with interchangeable staff. The situation of internal audit after unbundling of most SEBs became more uncertain as there was a change over from a “Statutory” institution to a Company under common commercial legal framework.

The successor companies have chosen to outsource the internal audit of field units to “Practicing Chartered Accounting Firms”. The guidelines have been given to these firms, formats of reporting have been prescribed for each function. However recent feedbacks indicate that this policy has not yet delivered improved results over those of the previous practice, hence it would be premature to call it an “Established Best Practices”.

1.3.3. GAPS IDENTIFICATION AND ANALYSIS

The gaps in the accounting systems and processes are common to the three utilities. They fall under the following categories:

• Organisation Standards and Management

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• Accounting System – I Technology standards Related

• Accounting System – II (Competence Related)

• Accounting System – III (Classification Related)

• Project Monitoring Related

• Internal Control and Legal Compliance Related

• Reconciliation and other Areas of Concern

The specific areas/processes of concern are:

a) Reconciliation and Classification of Opening Balances on 01-04-2005

At the time of their unbundling, the Government of Assam (GOA) left it to the new companies to break-up and classify the transferred accounts from ASEB into their proper heads. This task as well as their reconciliation with ASEB’s closing balances as of 31-03-2005 has not been accomplished. As a result, the companies’ accounts are unreliable, susceptible to manipulation and difficult to audit. The CAG appointed Statutory Auditors are not able to complete the audit except with large number of adverse qualification.

b) Director of Finance

The position had not been filled since unbundling; hence, a major functional department is headless and working with stopgap arrangement. The failure to appoint a permanent finance director is contrary to the guidelines of the Government of India for Government owned companies specially power companies that are successors of the State Electricity Boards.

c) Share Deposit

The amount of Share Deposit exceeds the Authorized, Issued and Paid up Capital on 31-03-2010. This is a violation of the Companies Act. It could appear as unsecured loan unless the authorized capital is increased to this level.

d) Classification of Capital Maintenance Expenditure into Capital, Revenue or

Deferred Revenue

Accounting Standards (AS) – 6, 10, 16 require the capitalisation of Capital maintenance, refurbishment and Revenue expenditure if they result in long-term benefits such as longer asset life and capacity improvement. The utilities have not adopted a mechanism for its implementation and accounting treatment in the field units.

e) Formation of Separate Audit Committees

Despite being a legal requirement in accordance with Section 292 A of the Companies Act 1956, no such Committee has been constituted. The constitution of this Committee is also a key measure of good corporate governance, which the Ministry of Corporate Affairs treats as a major requirement.

f) Accounting Application Committee / Unit Separately for each Company

(Internal Unit of Corporate Office)

The field Accounting Units apply varying accounting practices. There is no mechanism at the Head Office such as accounting manuals and handbooks to ensure uniform accounting application.

g) Internal Control System

There is no internal accounting control system to ensure that those assets are protected and that accounting records are complete and accurate.

h) Maintenance of Subsidiary Control Books

Most of the Common subsidiary control books, which were duly prescribed, have disappeared due to the lack of Internal Audit, Internal Control and shortage of staff. The maintenance of subsidiary control books is part of the normal responsibilities of any Accounting unit.

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i) Important Recommendation of Assam Electricity Regulatory Commission

(AERC)

The utilities fail to comply with many of the recommendations of the AERC such as those on the preparation of updated asset registers and the proper justification of Capital Expenditures.

j) Audit Observation of Internal Audit and Report of Comptroller and Auditors

General of India (CAG)

The CAG Report and observations are not promptly addressed.

k) Statement on Overdue Payment and Interest on the Bills of Micro, Small and

Medium Enterprises

The Micro, Small and Medium Enterprises Act of 2006 requires the payment of the bills of Micro, Small and Medium Enterprises within 30 days and 10% interest on delayed Payment. There is hardly any awareness in the utilities of this legal requirement that is reflected in the failure to reflect the status of compliance in their “Notes on Accounts” and its inclusion by the Statutory Auditors in their report.

l) Cost Audit

Sections 233 B along with sub-section (1) of section 227 of The Companies Act mandate Cost Audit that is not being undertaken by the utilities.

m) Statement of Non – Adherence / Part Adherence of Accounting Policy

The Qualified Statutory Audit Reports puts a question mark on the Capability of System and Management. There could be explanations on adherence and if this were the case, it is desirable to include in the “Statement of Accounting Polices” as a part of Annual Accounts. The need to make it more specific is a legal requirement as well.

n) Accounting Personnel Imbalance –Revision of Service Rules and Induction of

More Staff

Service rules have not been revised in line with the requirement for more professionally qualified staff at appropriate level with performance based promotion guidelines. The revision could however be a long process that will require legal opinion and the involvement of GOA.

There is currently an imbalance between the executive levels and staff levels; estimated at 90:10 with a large number of vacant positions. There is no written system of appointment and qualification criteria for “Executive Working Level.

o) Capability of Accounting System

The vulnerability of the accounting system is due to the combination of gaps in Accounting processes and control procedures; inadequate automation; lack of manuals, handbooks, chart of accounts and the like; and inadequate staff training.

p) Compliance with Schedule VI of Companies Act 1956 and Accounting

Standards

The utilities and their accounting system still have to adopt to the Companies Act which is made more difficult by the dispersal of the core accounting staff to the 3 utilities. In addition, there was less emphasis on Accounting Standards in the past since most of them were advisory in nature. Their accounting system was not designed compatible with Schedule VI of the companies Act.

q) Assets not in Use / Abandoned / Decommissioned / Fixed Asset Register

The lack of a fixed asset register is a serious gap that had been pointed out by CAG, AERC and Statutory Auditors. It leads to unreliable asset values, inventory, and depreciation and could cause theft. Attempts to draw-up a fixed asset register have not yet succeeded.

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r) Capital Work in Progress

Completed works are not promptly capitalised when put to commercial use but instead continue to be booked as Capital Works in Progress (CWIP).

s) Accounting for Stores and Inventory

Accounting for stores and inventory is a critical problem. The gaps include:

• Inability to adjust the or write-off from inventory the ‘Shortage or Excess’ found on physical verification due to lengthy and prolonged investigations;

• Absence of computerisation;

• Insufficient physical verification;

• Different valuation for consumption and closing. It is FIFO in Transmission, yearly fixed item rate for Distribution and Average Annual Cost in Generation;

• No proper inventory system or method adopted;

• Capital Stores are not maintained separately and issued on a value involving duplication of expenditure which stands capitalised at the time of procurement of plant and equipment.

t) Electricity Accounting Rules

The utilities continue to apply the Electricity (Supply) (Annual Accounting) Rules that was introduced in 1985 without incorporating the major changes in accounting standards and other rules and regulations that were introduced in the last 25 years. The Manuals, Formats and Reports are not available.

u) Internal Audit

It is a one-man operation in AEGCL. Internal Audit of expenditure has not been performed while Review Work was not done. Thus the internal check and balance is largely missing.

v) Reconciliation of Consumer Ledger

Reconciliation and updating of Consumers Ledgers, e.g. for receivables and other consumer date is mostly manual and unsatisfactory. There is an urgent requirement to accomplish this before the full migration to a computerised system.

w) Accounting Record Room

There is no proper Record Room, i.e. equipped with equipment indexing, termite and fire treatment, rack and other Equipment for the safe custody of records despite the requirement of the state custody of all Accounting Records at each Accounting Unit and Corporate Office for different periods. The following are the required periods for the custody of records:

• Section 209 of Companies Act prescribes 8 years;

• Income Tax provides for 6 years, but requires 10 years in case of raids /

• Investigations hence effective period is 11 years;

• Asset are to be registered until disposed off/ abandoned;

• Personal records of employees for the purpose of pensionable jobs-33 years;

• GPF / PF-until superannuation;

• Hydro project (drawings and contracts)-double the life of the project

x) Convergence of International Financial Reporting Standards (IFRS) with

Indian Accounting System

It will be introduced in India from 01-04-2012. The utilities have yet prepared for this.

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1.3.4. RECOMMENDATIONS AND COMPREHENSIVE FINAL ACTION PLAN

a) Development of Proposal for Integrated Financial Management Framework

The capability of the accounting system to deliver reliable, complete and timely information depends

on the satisfactory resolution of the gaps identified above. The possible solutions in the form of action

plans are discussed below. They are divided into short-term, medium-term, and long-term based on

the appraisal of their necessity and implementation.

b) Specific Actions Recommended, Budget, and Expected Impact

b.1) Short term Actions (Quick Wins)

b.1.1) Opening Balances on 01-04-2005 and Break-up of Group Heads

• Action Plan

o Completion of the break up among Generation, Transmission, Distribution of all Group Heads on 31-03-2005 (Audited);

o Break up of Group Heads into detailed Heads as per the closing Detailed Trial Balances on 31-03-2005;

o Reconciliation of detailed Trial Balance with Primary Accounting Units. Preparation of separate consolidated closing Trial Balance for each of the 3companies;

o Separate recording of the discrepancy between the detailed Trial Balance and Group Balance in a “Suspense Control Account” supported by a Suspense Control Register;

o The Consolidated Balance on 31-03-2005 as per the Detailed Trial Balances of all Accounting Units to be taken as Opening Balances as of 01-04-2005;

o Consolidated aggregate balance in “Suspense Account” to appear as separate Opening Balance under the proper group.

o Corporate Account Unit of each Company to continue to reconcile the “Suspense Account” on a Regular basis from 2011-12 only. There will be no need to reopen any years Account until it becomes close to zero; if it is an insignificant amount, charge to P & L A/c as “Debit / Credit of prior period and write Ok.

• Budget: No financial outlay. It will be qualitative change and satisfactory compliance. It will be compliance of Audit objectives and will provide authenticity to Accounting Data.

• Impact Assessment: Compliance with Audit Objections, reliability and accuracy of accounts.

• Implementation Responsibility

o Combined Team of the three Companies to break up among the utilities

o Separate ad-hoc team of 2 employees under the Corporate Accounting Unit of each company to continue the reconciliation of suspense account.

• Implementation Imperatives

o Computer Program to prepare consolidated Detailed closing Trial Balance of each Accounting Unit as of 31-03-2005 and for the transfer of Consolidated Difference to a “Suspense Accounts” in newly created account;

o Availability of Detailed consolidated Trial Balance in Field Accounting Units;

o Creation of an ad-hoc team for this purpose in each company.

• Performance Monitoring Indicators

o Monthly Progress Report to Audit Committee or Board of Directors.

b.1.2) Accounting Setup

• Action Plan

Appoint a regular Director of Finance for at least three-year tenure.

• Budget: Approximately Rs. 2 Million equal to US$ 44 thousand annually, which is equal to the annual salary/benefits of other Directors in the Companies.

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• Impact Assessment: Clear management responsibility and lines of authority; timely and proper resolution of finance and management issues brought for resolution. The appointment is also in-line with the guidelines for public sector undertakings issued by the central Bureau of Public Enterprises of the Government of India. As successor companies to ASEB, it will align the companies with the practice of other unbundled companies such as those in UP, MP. . He will lead all the Financial and Accounting activities.

• Implementation Responsibility: Government of Assam and Chairman of the Board of Directors of each company.

• Implementation Imperatives: Government of Assam to facilitate appointment.

• Performance Monitoring Indicators: Appointment within 6 months.

b.1.3) Share Capital

• Action Plan: Either convert the excess Share Deposit Amount to Paid up Capital in FY 2010-11 or transfer to "Unsecured Loans" from GoA.

• Budget: No financial outlay.

• Impact Assessment: Legal compliance.

• Implementation Responsibility: Company Secretary.

• Implementation Imperatives: Government of Assam and recommendation of the Board of Director.

• Performance Monitoring Indicators: Not to appear in the Balance Sheet for 2010-11 without recommended change.

b.1.4) Classification of Expenditure as Capital, Revenue Or Deferred Revenue Expenditure.

• Action Plan: Issuance of guidelines with specific criteria for classifying expenditures as capital, revenue, deferred revenue expenditure depending on the purpose and the effect of such expenditure such as increase in life of the existing asset.


• Impact Assessment: Full compliance with Accounting Standards.

• Implementation Responsibility: Proposed Accounting Application Committee.

• Implementation Imperatives: Prompt and regulation implementation reports from the field units based on format to be developed by the Accounting Application Committee.

• Performance Monitoring Indicators: Monthly reports from Accounting Application Committee to CGM.

b.1.5) Constitution of Audit Committee:

• Action Plan: Constitute the Audit Committee in accordance with Section 292 A of the Companies Act 1956.


• Impact Assessment: Legal compliance; prevention of fraud and manipulation; better coordination with the Statutory Auditor and CAG.

• Implementation Responsibility: Board of Directors / Company Secretary.

• Implementation Imperatives: Government of Assam through the Board Chairman and Company Secretary to take the lead as compliance with the Companies Act falls under his purview.

• Performance Monitoring Indicators: Company Secretary to put up the proposal, defining the scope of work among others, in consultation with Director of Finance. Board issuance of the corresponding order to constitute the Committee.

b.1.6) Creation of the Accounting Application Committee

• Action Plan: Constitute the Accounting Application Committee in each company with at most 3 Account Executives as members and to be headed by CGM.

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• Impact Assessment: Control of corporate accounting and proper application of accounting rules and standards.

• Implementation Responsibility: Director of Finance or Chief General Manager.

• Implementation Imperatives: Commitment and participation of all primary accounting units by raising problem encountered and proposing solutions. The adequacy of supporting staff for the Committee must also be ensured.

• Performance Monitoring Indicators: Formation of the Committee

b.1.7) Internal Control System

• Action Plan: Outsourcing of the work to prepare an Internal Control System for accounting that is designed for the protection of assets and the completeness and accuracy of all accounting records. In particular, the system should ensure:

o That the company operates according to National Laws and Standards;

o Greater staff commitment to the proper performance of the finance and accounting functions;

o A balanced focus on both short term and long-Term objectives;

o Compatibility with the actual situation of the company;

o Consistency in all companies over time;

o Adaptive financial and accounting control systems;

o The evolution of cost effective control.

• Budget: Rs 1 Million or US$ 22 Thousand.

• Impact Assessment: Improved efficiency and internal control; timely and comprehensive accounting reports.

• Implementation Responsibility: Chief General Manager / Accounting Application Committee.

• Implementation Imperatives: Clear definition of the scope of work starting with a complete description of the current deficiencies to be addressed by the system.

• Performance Monitoring Indicators: Appointment of external expert and development of the system.

b.1.8) Maintenance of Subsidiary Books:

• Action Plan: Maintenance of required subsidiary books.


• Impact Assessment: Compliance with accounting requirements.

• Implementation Responsibility: Corporate Accounting Office / Accounting Application Committee.

• Implementation Imperatives: Appointment of staff to maintain the books and computerisation.

• Performance Monitoring Indicators: Maintenance of subsidiary books as confirmed by Internal Audit.

b.1.9) Important Recommendation of AERC:

• Action Plan: Compliance.

• Budget: Variable depending on the work to be performed.

• Impact Assessment: AERC determination of the utilities revenue requirement and approved tariffs based on complete and reliable operating and financial accounts.

• Implementation Responsibility: Accounting Application Committee.

• Implementation Imperatives: Acceptability of AERC.

• Performance Monitoring Indicators: Quarterly Review of Progress.

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b.1.10) Audit Observation by Internal Audit and CAG:

• Action Plan: Compliance.

• Budget: Variable depending on the work to be performed.

• Impact Assessment: Compliance.

• Implementation Responsibility: Audit Committee.

• Implementation Imperatives: Acceptability by Internal Audit and CAG.

• Performance Monitoring Indicators: Quarterly Review of Progress.

b.1.11) Statement on Overdue Payment and Provision of Interest on the bills of Micro, Small and Medium Enterprises

• Action Plan: Status to be shown in the “notes to accounts”.

• Budget: On financial outlay.


• Implementation Responsibility: Company Secretary / CGM.

• Implementation Imperatives: Action by Company Secretary/CGM.

• Performance Monitoring Indicators: This must appear in the Annual Accounts for the year 2010-11.

b.1.12) Cost Audit:

• Action Plan: Appointment of Cost Auditor by each of the three companies. The budget also includes cost of installation of Cost Accounting System.

• Budget: Rs 0.5Million or US$ 11 thousand for recurring salary and one time outlay for the installation of a cost accounting.

• Impact Assessment: Compliance with the Companies Act.

• Implementation Responsibility: Company Secretary / Audit Committee.

• Implementation Imperatives: Timely short-listing of candidates and approval by the Board of Directors and preparation of Audit Books.

• Performance Monitoring Indicators: Appointment and approval by the Board of Directors:

b.1.13) Statement of Non Adherence / Part Adherence of Accounting Polices:

• Action Plan: Develop Standard Statement format.


• Impact Assessment: Legal compliance and alignment with Best Practice.

• Implementation Responsibility: Chief General Manager / Audit Committee / Accounting Application Committee.

• Implementation Imperatives: True and Fair disclosure of company accounts.

• Performance Monitoring Indicators: Company secretary to interact with Chief General Manager and Audit Committee.

b.2) Medium-term Actions

b.2.1) Organisation of Finance and Accounting Department:

• Action Plan:

o Revision of Service Rules for Accounting Executives and staff including qualification criteria and performance based promotion system;

o Proper balance of Executive Level and supporting staff complement. Approximately 100 new employees at staff level to be recruited in each company

• Budget: Annual recurring expenditure of approximately Rs. 7.2 Million or US$ 160 Thousand.

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• Impact Assessment: Timely and complete performance of critical accounting functions and processes.

• Implementation Responsibility: Director Finance / HRD with CGM Accounts.

• Implementation Imperatives: Support of service unions.

• Performance Monitoring Indicators: Revised service rules and better balanced executive and staff complement.

b.2.2) Capability of Accounting System to Generate Timely and Reliable Reports:

• Action Plan:

o Computerisation of Accounting System with on-line network:

o Review all Accounting Heads, preparation of Accounts Hand Book, Manuals and Standard Formats.


• Impact Assessment: Enhanced capability to generate timely, complete and reliable reports.

• Implementation Responsibility: Jointly by Account Application Committee, Company Secretary and Corporate Account Office.

• Implementation Imperatives:

o Staff training on Computerised Accounting.

o Adoption of Annual Accounts as per the requirement of the Law.

• Performance Monitoring Indicators: Reduction in qualifications in the Statutory Audit Report.

Corporate Account Office to submit progress to CGM every month.

b.2.3) Compliance with, Schedule VI of Companies Act 1956 and With Accounting Standards:

• Action Plan: Board to direct the Accounting Application Committee to be responsible for compliance.



• Implementation Responsibility: Creation of the Accounting Application Committee.

• Performance Monitoring Indicators: Compliance as certified by Auditors:

b.3) Fixed Assets Register/Assets not in use or abandoned:

• Action Plan: Creation of Fixed Asset Register by external appraisal experts and chartered accountants.

• Budget: Rs. 10 Million or US$ 22 Thousand.

• Impact Assessment: Fair and true picture of companies’ assets and compliance, compliance with AERC requirements.

• Implementation Responsibility: Chief General Manager (Technical) with the Assistance of Accounting Application Committee.

• Implementation Imperatives:

o Commitment of field Engineer and Engineering Staff.

o Provision of logistic for the Consultants’ site visit for Physical Verification.

o Preparation by companies’ engineers as As-built plans, system maps.

• Performance Monitoring Indicators: Work up date reports up to completion.

b.3.1) Capital Work in Progress:

• Action Plan: Capitalisation of completed works that are still classified as CWIP.

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• Impact Assessment: True and fair picture of the company’s assets.

• Implementation Responsibility: Chief General Manager (Technical) with the Assistance of Accounting Application Committee.

• Implementation Imperatives: Commitment of field Engineer and Engineering Staff.

• Performance Monitoring Indicators: Monthly Progress reports and completion of the work.

b.3.2) Accounting for Stores and Inventory:

• Action Plan: Update the Stores Manual. Complete Computerisation with capability for on-line networking.


• Impact Assessment: Proper management of stores and inventory, true and fair picture of the inventory that is a crucial input to procurement decisions; prevention of theft and pilferage.

• Implementation Responsibility: Chief General Manager (Stores), Accounting Application Committee.

• Implementation Imperatives: Correct physical count and adoption of inventory management system.

• Performance Monitoring Indicators: Monthly inventory report to Director (Technical) and Director (Finance).

b.3.3) Internal Audit:

• Action Plan: Strengthen the teams with adequate staff at AEGCL. Internal Audit team should report to the Managing Directors of the companies only.


• Impact Assessment: Strengthen internal control.

• Implementation Responsibility: Director Finance / CGM / Audit Committee.

• Implementation Imperatives: Overcoming expected resistance to removal of interchange-ability clause.

• Performance Monitoring Indicators: Internal audit performed.

b.3.4) Custody of Accounting Records:

• Action Plan: Organise a proper Accounting Record Room at the Corporate Offices of the three Companies that will have custody of accounting records as required by law:

o Section 209 of Companies Act prescribes 8 years.

o Income Tax provides for 6 years, but requires 10 years records in case of raids / investigations.

o Assets to be recorded in Register until they are disposed of:

o Personal records of employees for the purpose of pensionable jobs-33 years.

o GPF / PF-till superannuation.

o Hydro project (drawings and contracts)-double the life of the project.


• Impact Assessment: Compliance with legal requirements.

• Implementation Responsibility: Accounting Application Committee.

• Implementation Imperatives: Funding for setting up the record room with the required Equipment.

• Performance Monitoring Indicators: Functioning record room.

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b.4) Long term Actions

b.4.1) Convergence with IFRS

• Action Plan: Outsource to a Competent Chartered Accountant Firm.

• Budget: To be determined.

• Impact Assessment: Convergence and compliance with Government of India requirement.

• Implementation Responsibility: Chief General Manager.

• Implementation Imperatives: Mandatory participation of Accounts Executive in the work of consultants.

• Performance Monitoring Indicators: Detailed Discussion meeting of Accounting Executives should be held to the assist CGM to be organised by AAC.

1.4. FINANCIAL MANAGEMENT SYSTEMS

1.4.1. AS –IS ANALYSIS

a) Organizational Structure

a.1) Relationship with ASEB

AEGCL is only partially autonomous with regards to financial management. Investing and the management of projects funded by external grants and/or concessional loans are still carried out under supervision of ASEB. Proposals for and releases of loans and grants are coursed through ASEB’s project management unit. AEGCL is required to submit to ASEB technical completion certificates and requisition for the release of funds to pay project contractors

Personnel assignment, recruitment and promotion are also partly controlled by ASEB. ASEB recently advertised for and recruited about 50 Account officers of which a number were assigned to AEGCL. Operating overlaps also remain such as when ASEB executed an agreement with Amtron for the use of AEGCL’s tower in exchange for free Internet services to its utilities.

AEGCL has full control over internally generated funds and operational expenses.

a.2) Management Structure and Staffing

A Chief General Manager (CGM) leads the Finance and Accounting Department. The department covers corporate finance, preparation of final account, budgets, development of various MIS requirements, internal and statutory audit, preparation of payroll and pension, GPF and the preparation of finance and accounting reports required by the regulator and other stakeholders.

Finance and accounting officials hold multiple positions due to shortage of qualified personnel. This leads to delays in the decision-making and dilutes their focus from their core responsibilities. At the same time, the CGM for finance and accounting of AEGCL is also the CGM for finance and accounting of APGCL and is a member of the Pension Trust.

The Deputy General Manager (DGM) for finance is directly responsible for multiple important finance and accounting function like Budget, Corporate finance, vendor’s payments, Bank overdraft account, Establishment expenses; results in wide span of controls.

General Manager (GM) for Audit is directly reporting to Chief General Manager CGM) for finance. Internal audit should directly report to managing Director (MD).

Senior manager for accounts is directly responsible for multiple finance and accounting functions like compilation of account, corporate Taxation, Budgets under the supervision of Deputy General Manager for finance and accounts; results in wide span of controls.

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Figure 6 - AEGCL’s Organization chart

a.3) Management Information System

Operations are largely manual with a limited degree of automation. Financial accounts are compiled in EXCEL. The lack of automation does not permit the integration of finance and accounting functions.

b) Financial Management Functions

b.1) Treasury Management

b.1.1) Working Capital Management System

AEGCL sends monthly wheeling invoice to APDCL. However, the utility only receives partial payments, based on its requisitions against invoice that are usually for the payment of its operating expenses only. AEGCL’s Financial Statements for FY 2007-08 AEGCL showed the following:

• Collection efficiency is about 68.80% of the billed amount ;

• Day’s receivable outstanding at about 171.81 days;

• Net working capital of Rs. 213.39 Crores ;

• Current ratio 1.53;

• Current assets of Rs.612.31 Crores ,

• Current assets turnover ratio at 0.57.

• As per the tariff petition filed by AEGCL to AERC, Rs. 96.68 Crores of the proposed working capital will be used to service its financial obligations.

b.1.2) Financial Risk Management

AEGCL has taken third party insurance for its all vehicles. No insurance cover has been taken for its transmission equipment and network. Employees are covered by an optional Group Insurance linked scheme.

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b.1.3) Fund Management

The company does not have any defined cash management policy and minimum cash balance criterion. It invests idle capital investment funds in short-term temporary investment.

AEGCL secured an overdraft facility with the SBI, New Guwahati Branch for head office amounting to Rs.3.5 Crores at 7% per annum. Total interest paid by AEGCL was Rs.31.94 Lakhs I FY 2008-09.AEGCL’s outstanding balance on the facility was Rs.3.48 Crores as of 31st March 2009.

AEGCL had secured loans in the form of ASEB bonds amounting to Rs. 24.40 Crores as of 31st March 2009 with accrued interest accrued of Rs 18.45 Crores. Bonds amounting to Rs.36.33 Crores were redeemed in FY 2008-09.

Rs 164.41 Crores of GOA loans were booked as of 31st March 2009. No payments were made against amounts due after 31st March 2008. Interest on loans is charged to profit and loss account and shown as interest accrued on GOA loan in the balance sheet.

AEGCL secured loans from the Power Financial Corporation PFC for some of its projects. The loans were fully repaid during 2009-10.

Loans from ADB as of 31st March, 2009 were booked at Rs. 31.66 Crores. The loans have not been accrued for repayment yet and the repayment schedule is unclear.

The key operating and financial results of AEGCL as of 31st March 2009 are:

• Total gross turnover of Rs. 348.60 Crores for FY 2008-2009,

• Total Wheeling revenue of Rs. 335.43 Crores of which Rs.157.89 Crores was outstanding on 31st march 2009,

• Total receivable of Rs. 356.15 Crores,

• Total Amount payable of Rs.398.72 Crores ,

• Payable Turnover ratio , 0.87,

• Receivable turnover ratio , 0.98,

• Bank Fixed Deposit of Rs.158.11 Cores.

Finance does not monitor CWIP. The Department may have to in order for the timely recovery in the tariff of the interest charges and depreciation expenses of completed projects.

b.1.4) Trade payable

• Processing of PGCIL Charges

Power Grid Corporation of India limited (PGCIL) sends the wheeling to AEGCL’s CGM for transmission. The latter verifies the invoice and forwards it to CGM Finance who in turn forwards the request to DGM for finance for verification and release of pay order. CGM finance then forwards the requisition to his/her counterpart at APDCL for the release of the fund in its account so that payment could be made against PGCIL charges.

• Processing of other operational expenses

Vendors’ invoice are sent to AEGCL’s Senior Technical Manager (in case of Division); to the General Technical Manager (for Circle) and to the Chief General Technical Manager (for Head office) The invoices are verified and processed at the appropriate levels and are ultimately submitted to the CGM for finance. The CGM finance then forwards the requisition to APDCL’s CGM for finance for the release of fund from its account so that payment could be made. The respective Drawing and Disbursement officers (DDO) are responsible for the deduction and payment of the appropriate taxes before payment is released.

• Payment of materials

Suppliers submit their Bill along with Challan (duly signed by Goods recipients) and duly verified GRS Goods Receipt Sheet (GRS) to the appropriate division office/circle office. The invoice is approved at Head office and fund is released to the Circle office or Division office for disbursement to vendors.

The decentralized processing of Vendors’ and supplier’ invoices has caused occasional payment delays and non incorporation of all bills processed for payments. Per internal Audit report bills against the purchase and contractor bills amounting to Rs.7.47 Lakhs and Rs.22.53 Lakhs for the 132 KV, Grid

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Sub Station, AEGCL Dibrugarh were processed during 2007-08 but were not incorporated which caused a corresponding understatement of the liability and expenditure heads.

Some tax deductions for TDS and VAT by the DDOs at the Subdivision, Circle and Zones were incorrect. The internal audit report also found instances when taxes were not deducted at all. One internal report states that: (1) no TDS and VAT were deducted from the repair bill for the 132 KV Grid Sub Station , AEGCL, Dibrugarh for the period ended march 2008; (2) VAT was not deducted from the Rs 1.14 payment for the Tinsukia Grid Sub Station (TGSS), AEGCL, Sukanpunkhuri, Makum Road, in the same period.

c) Budgetary Control

All Divisions, Circles and Zones prepare their yearly budgets request for Staff cost, operational and maintenance expenses and general administration expenses largely on the basis of their last year expenses with some adjustment for change in the projected expenses during the budget year. These requests are then submitted to the head office for compilation and for working out total Budgeted amount for each head of expenses. Head office then compiles all requests; compare the same with available funds, i.e. the regulator approved revenue requirement (ARR) and submit the consolidated budget request to board for approval. Approvals by the Board are conditional on the approval by the regulator of the utility’s ARR. If the amount approved by the regulator is less than the budgeted expenses, the budget is again revised and aligned with the approval from regulator. The Variance analysis done is only relative to the preceding year’s expenses and to regulatory approval. No other variance analysis is undertaken. Request for additional fund beyond the approved budgets requires the approval of top management.

Figure 7 - AEGCL’s budget control process

c.1) Inventory and Store Management

Each Sub Station in the grid maintains an inventory of materials for its consumption. AEGCL does not maintain centralized stores. The DGM is responsible for material planning. Divisions forward their material requisitions to Circles which issues the procurement order. The Junior and Senior Managers at the Sub Division are the custodians of the stores and spares.

The company is carrying a large inventory of obsolete/non useable materials at divisional stores that indicates some inefficiency in the procurement and/inventory management systems. The Annual Accounts for 2008-09 contained Rs 5.99 Crores worth of unserviceable and obsolete materials.

c.1.1) Receipt of materials

Suppliers send the material as per Purchase Order to stores at the Substation. The Technical Junior manager and Technical Senior Manager at the substation receive the materials along with 3 copies of the Bill and Challan. They sign the Challan and return them to the vendors after they are inspected. The Store keeper prepares 3 copies of GRS; enters the details of material in the GRS Control register; and sends the GRS copy to the Account Officer of the Accounts Department for booking and processing of payments to vendor. Shortage and Damage are recorded in the Challan and GRS control ledger.

c.1.2) Issue of materials

The Technical Junior manager and Technical senior manager are the actual end users of the materials; i.e.; for maintenance and capital works. They requisition the materials from the stores; and submit material utilization statements to the accounts department. The materials are classified according to capital expense or operational expense. The material utilisation statements submitted to the substation contained incorrect classifications.

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c.2) Procurement Management System:

Materials are classified into A, B and C. The procurement of type C materials is decentralized to the sub division level. The Division executive engineer or senior manager subject to further approval by the Zonal Purchase Committee can approve purchase cost of up to Rs. 50,000. The Circle Superintendent Engineer again subject to the approval of Zonal purchase committee may make by the Technical Deputy General Manager or purchases of up to Rs.1 Lakhs. General Manager for Technical, being a member of Zonal purchase committee can purchase up to Rs.5 Lakhs. The Technical Chief General Manager at Head Office Level can procure materials through tendering with the approval of the Technical Purchase Committee. Items A & B are subject to centralized procurement.

c.3) Tax Management

The company is subject to VAT and TDS .External financial experts have been contracted to prepare and file the utility’s taxes.

1.4.2. BENCHMARKING PROCESS AND STANDARDS

This part of the report supplements the Benchmarking discussion with a discussion of the Best practices of a comparator Indian Generation Company and the transmission company of the Philippines.

a) The National Grid Corporation of the Philippines3

The National Grid Corporation of the Philippines (NGCP) is a private entity that was awarded by the Philippine government a 50 year franchise to operate, maintain, expand and further developed the country’s transmission system. The grid was previously operated by TRANSCO, a state – owned company. It was turned-over to NGCP in 2009. While the grid continues to be owned by the government, NGCP as the concessionaire is authorised to operate and undertake investments to maintain and expand the system and to receive the profit from operations in exchange for a concession fee. NGCP has also been designated as the system operator of the grid.

The system currently covers 19,425 circuit kilometres of transmission lines and 23,853 megavolt amperes (MVA) of substation capacity. NGCP has 299 customers nearly half of which are distribution utilities of which 119 are small electric cooperatives with the remainder comprised of generators and direct connection customers. The latter consists of large industrial and commercial customers.

Like any other company that was turned-over from government to private management, its operating systems including its financial management systems are still in transition.

a.1) Organizational Autonomy

NGCP is completely autonomous from the government. It has its own Board of Directors with 10 members including the Chairman.

a.2) Working Capital Management

The company’s current ratio is 1.64 while its liquidity ratio is 1.81. It employs a simple but effective system to manage its receivables and payables. Customer payments are made to the company accounts at a designated bank (or its correspondent banks where the bank does not have a branch) nationwide that automatically reports by electronic transmission the collection the day after to the company. Identification of prompt and delinquent customers from the bank reports are facilitated by the inclusion of a Bills Payment Slip that matches the identity of the payment to the specific customer. To guard against the relatively high credit risk of electric cooperatives, security deposits of the individual electric cooperatives are held and pooled by the Philippine Rural Electric Cooperatives Association (PHILRECA) that promptly releases the corresponding amount to cover the arrears of a delinquent member. The company’s payables are covered by Letters of Credit with a designated bank and are promptly paid subsequent to a 3 days negotiation period.

3 Based on interviews conducted by project team with Senior Officers of the NGCP

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a.3) Fund Management System

The company has no debts. As a regulated utility, all its expenses for operations and capital investments are programmed according to

Its capital investment plans and revenue requirement that are approved by the regulator. Since the tariff methodology covers a 5 year regulatory period, the company is able to make long –term capital investment and operating plans and fund them from operating revenues earned during the period. Project management units verify the availability of funds prior to project commencement. Excess/uncommitted funds are immediately placed on interest-bearing investments.

a.4) Inventory and Procurement Management Systems

NGCP currently utilizes a company developed Oracle-based inventory and procurement management system that was inherited from the previous operator. It is also exploring the possible migration to a SAP system, including ERP. At the same time, it is discussing with large distribution utilities in the country and its counterpart transmission utilities in ASEAN the setting-up of a common pool of inventory of critical equipment that could immediately be deployed in cases of emergency. This system is intended to reduce the cost of holding expensive inventories and shortages and is envisioned to assign responsibilities for stocking of specific equipment to each country.

a.5) Budget Management System

The company practices zero-based budgeting. Variance analysis is performed monthly and is regularly monitored by the cost centres, i.e. at the division, district, substations, and at headquarters. Variances must be justified before the release of additional funds.

a.6) Risk Management System

Credit risks are managed as described above. NGCP’s market risk is nil because of the nature of its operations (no fuel and power cost fluctuations to contend with) and because its tariffs including its ancillary service charges are pre-set and approved by the regulator. The company has an Industrial All-Risk insurance with the Government Service Insurance System (GSIS).

1.4.3. GAPS IDENTIFICATION AND ANALYSIS

a) Organisational autonomy

Lack of autonomy from ASEB with respect to projects funded from external sources. ASEB continues to undertake the capital budgeting and management of these external funds.

b) Fund Management: Centralised Cash Management System

Instead of paying against the invoices AEGCL, payments are made by APDCL against subsequent requests by AEGCL for the release of funds to cover their operational expenses only such as for the payment of their suppliers/vendors. The system constrains the utilities’ financial autonomy; and unreasonably subjects the financial and operating viability of AEGCL to APDCL’s, which continues to suffer from persistent and significant fund shortages.

The shortcomings of the centralised cash management system are manifested in the: a) non-repayment of the GOA loans of the utilities since 2008; and b) the unclear repayment status of ADB loans in the books of the utilities.

c) Financial Risk Management

There is an absence of insurance coverage for the AEGCL employees and network. Work related injuries, damage and loss could cause significant financial liability to the utility.

d) Budget Management

Actual expenses exceed he approved budget; no variance analysis conducted during the financial year.

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e) Procurement Management

• Decentralised procurement by field units of class C and D materials could results in excess inventory of these materials in the system as a whole;

• Failure to adopt a Rate contract mechanism for the procurement of materials. Zone chief engineers procure cases A and B materials based on requisition sent by their respective field units. As confirmed by the office of the CGM for Materials, the purchase prices could vary from Zone to Zone in the absence of a rate contract mechanism.

1.4.4. RECOMMENDATIONS AND COMPREHENSIVE FINAL ACTION PLAN

a) Organisational autonomy

The current practice where ASEB continues to control the planning, disbursement and management of funds provided by external sources, constrained the financial independence of the utilities, slowed the development of their financial management capabilities and impeded their financial planning. These funds, which are mostly intended to fund the capital investment requirement of the utilities, are in the form of grants and loans from the State and National Governments and from the ADB. While ASEB controls their disbursement, the servicing of the principal amortization and interest charges are funded from the utilities’ earnings. As a result, capital investment projects are implemented without due consideration of their impact on the utilities’ over-all profitability, in terms of cash-inflows and inflows. The current set-up also hampers the formulation of long term financial plans by the utilities of which in-flows and out-flows for/from capital investments and financing charges are the major components.

This gap and its adverse effect on the utility can be addressed by devolving to the utilities the management and disbursement of the funds while ASEB continues to monitor their implementation. An alternative solution; one that conforms with the current Loan/Grant Agreements that names ASEB as the executing agency would be for ASEB to continue to receive the funds subject to automatic disbursement to the utilities upon the latter’s submission of detailed project implementation plans. Under this arrangement, the utilities would draw up their own capital investment plans (not to be confused with project proposals submitted to financiers) and directly pay project contractors from their own accounts instead of the current practice where ASEB prepares the capital investment plans and disburse payments to project contractors from ASEB accounts. The utilities will also be required to submit project and funds status reports to ASEB.

To operationalize this proposal, a Notification from GOA will be required. The Notification should: a) clarify the status of the residual functions conferred on ASEB in the Unbundling Notification over the management and disbursement of these funds; and, b) mandate the financial autonomy of the utilities from ASEB as regards the planning for, management and disbursement of these funds. The notification should be secured without delay, i.e. in 6 months to enable the utilities to draw up their financial plans for the following financial year immediately.

b) Financial Risk Management

The absence of a structured risk management policy can impede the utilities’ operational and financial sustainability in long run. Some of the risks that the utilities face are from the a) lack of insurance cover b) employees including those exposed to high risk of work-related injuries such as the linemen; c) financial hedging for power purchase cost. Good risk management underpins a successful business and is an integral part of the management processes. The objective of utilities is to accomplish corporate goals, so it becomes necessary for the Company to ensure its success by identifying key risks in a timely manner and by implementing appropriate strategies to maximise business opportunities, manage uncertainties and minimize potential hazards.

This gap can be addressed by adopting a structured financial risk management system. As a first step, the utilities should designate an official to be responsible for risk management. This official should identify various risks that can be encountered during the daily operations of the utilities and capture these in a risk register. The significance of each risk is determined as high, medium or low depending on whether existing control measures can mitigate them adequately. The risks are then ranked according to their significance and likelihood of occurrence. The residual exposure is determined by assessing the effectiveness of their corresponding mitigation/control measures. Thereafter, a Risk Intensity and Probability matrix should be developed and the necessary actions to mitigate the risk are taken after conducting a cost benefit analysis.

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b.1) Risk Classification

Risk classification can be done through risk score, which is product of significance and likelihood of the risk. Risk scoring is arrived on the basis of criteria, which are to be determined by the organisation. A sample criterion is given in the table below.

Table 13 - Financial Risks Classification Example

Significance

Likelihood Low (1) Medium (2) High (3)

Low (1) Low (1) Low (2) Medium (3)

Medium (2) Low (2) Medium (4) High (6)

High (3) Medium (3) High (6) High (9)

c) Fund Management System

The objective of the power reforms act is to make the generation, transmission and distribution utilities financially viable. Major problems identified include: a) APDCL not paying the power and transmission bills in full that in the absence of an escrow arrangement adversely affects the liquidity of the other two utilities; b) non-repayment of GOA loans since 2008.

The gaps in the fund management system and its adverse effect on the utilities finances can be addressed by the full devolution to the utilities of the management of their funds and the removal of the centralised cash management system. Once this is done, the utilities should prepare their respective annual operational plan (AOP) and project their long-term and short term fund requirement inclusive of funds requirements for capital investments. Monthly fund requirement can be estimated as per projected/estimated cash in-flow and out-flow. Funds can be raised in an optimal manner after doing cost benefit analysis of each proposal. Payment against power bills raised by APGCL and transmission charges bill raised by AEGCL to APDCL shall be secured by an escrow arrangement against their own funds/assets; not ASEB’s.

d) Budget Management system

As per current practice, utilities prepared annual budget based on the feedback received from units and last year actual figures. The approved annual budget is revised in accordance with their approved Annual Revenue Requirement (ARR). The utilities do not conduct variance analysis during the financial year and a pre-audit of proposed expenses prior to their approval.

A systematic budgeting process backed by an automated Management Information System is required to address the vulnerability of the budget process. Such a system should enable the CGM for Finance to regularly monitor the detailed expenditures per budget line vis-à-vis their approved allocation, the percentage of deviation and reason thereof. Utilities can also implement enterprise resource planning (ERP), one of whose modules (CO module) can take care of budgetary and cost controls.

e) Procurement Management System

As per current practice, various purchase committees are formed to execute procurement agreements with vendors for material required, as per Delegation of power (DOP) sanctioned and as per category of the material. A and B materials are procured by the Technical purchase committee (TPC) while C and D materials are procured by the Zone Purchase Committee (ZPC). There is no rate contract mechanism for the procurement process which results in price variance of the same materials procured by different ZPCs. The process also results in overstocking of materials at different zones.

The gaps and its adverse effect can be addressed by implementing a rate contract mechanism so all purchase agreements executed by various purchase committees and offices can be executed at rate contracts and where it occurs, stating the reason for any deviation. This mechanism results in uniform prices for the same materials procured. In addition, the centralised procurement of Category A and B

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materials with direct field deliveries will generate bulk purchase savings. A standard format should be designed for, ideally, an automated MIS that includes details of the major items such as their prices, procured by the various TPCs and ZPC’s.

f) Working Capital Management

As per current practice AEGCL does not have any specific working management policy to manage working capital and to follow the norms set by the regulator. The most critical weakness is the inability of APDCL to pay AEGCL in full and on time. This problem can be addressed by an Escrow arrangement for securing payment against power purchase and transmission bills.

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1.4.5. SUMMARY TABLE COVERING THE SHORT TERM, MEDIUM TERM AND LONG TERM ACTION PLANS

Table 14 - Summary Table covering the above points – Organisational Controls

No Priority Typology Action Description Budget

(must) Expected Result

Implementation

time

Implementation

Responsibility

1.1 Short

term

Institutional

Organisational Autonomy

ASEB to provide autonomy

to AEGCL in the financial

management of externally

provided funds for capital

expenses such as those in

the form of grants;

concessional loans from

National and State Agencies

and regular financing

facilities from secured from

financial institutions.

Nil Better financial

planning and

management by the

utility and enhanced

financial

independence

Short (1 to 6

months)

ASEB in coordination

with AEGCL Management

1.2 Short

Term

Functional

Appointment of CGM Finance

for AEGCL

The cost of

Salary,

benefits;

office space

and facilities

for one CGM

at

approximatel

y Rs 12 Lakhs

per year.

Financial autonomy

of APGCL and

AEGCL from each

other; more focus

on the financial

management

requirements of

each utility.

Medium (from 6

months to 1 year)

for recruitment of

new CGM Finance

Board and management

of APGCL and AEGCL

2.1 Medium

Term

Functional

Working Capital

Management

Discontinuation of

centralized cash

management system and

replacement with separate

and autonomous fund

management system

exclusive to each utility

Nil

Clarity in the

financial positions of

each utility and

better management

of their respective

finances that is now

impeded under the

centralized cash

management

system

Medium

Boards and Top

Management of the 3

utilities

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Implementation

time

Implementation

Responsibility

2.2 Medium

term

Functional Security arrangement for

the payment of power

purchase bills, such as

through an Escrow.

Banks

services

charges as

per banks

policy.

Rs. 5 Lakhs

per

agreement.

Reduction in

account receivables

from APDCL.

(Rs.191.74 Crores

was outstanding as

of 31st March, 2010;

as per balance sheet

for 2009-10).

Medium term CGM Commercial and

Finance of AEGCL

3.1 Medium

term

Technical Fund management

System

Clarify Status and

repayment schedule of GOA

loan to the tune of

Rs.281.31 Crores.

The loan either to be

restructured as Equity or the

repayment obligation to be

passed through tariff.

Nil Avoid fund shortage

in the repayment

financial year.

Government to

allow the repayment

obligation through

tariff allowed.

Re.0.84 paisa/ unit

is required to

repayment

accumulated debts

and Re.0.26

paisa/unit required

to pay future

obligation.

(assumption: figure

estimated on the

basis of data for F.Y

2009-10 and

repayment is

assumed to be in 6

years)

Medium term

4.1 Medium

Term

Functional

Risk Management System

Insurance of transmission

network.

Insurance

premium of

cover note.

Mitigation of

Operation risk

Medium Term

CGM (Transmission ) and

Finance

4.2 Medium

Term

Functional Group accidental Insurance

of Employees.

Insurance

premium of

cover note

Mitigation of risk

and employees

satisfaction.

Medium term. CGM HR AND FINANCE

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Implementation

time

Implementation

Responsibility

In NDPL’s

Case;

Approx. Rs.

1000/- for

sum insured

of Rs. 1 Lac

per employee

per annum.

5.1 Short

Term

Functional Inventory Management

System

Proper storage and

accounting of inventory

through the introduction of

an Inventory Management

System.

Cost of hiring

external

expert to

develop

Inventory

Management

system and

conduct staff

training.

(Details of

budget could

be extracted

from IT

report)

Elimination of

inventory losses

through

obsolescence, fraud

and waste.

Inventory losses

estimated at Rs.

12.89 Crores.

(provision as per

balance sheet as on

31st March’2010)

Long (2 to 3 years

including training)

CGM (D), DGM (CSD)

and CGM (F)

5.2 Long

Term

Technical Auction/sale of

unserviceable inventory

identified

Administrativ

e cost to

execute sale.

Opportunity cost of

the revenue

generated out of the

sale/auction of the

non serviceable

inventory.

Short (6 months to

identify inventory to

be auctioned)

6.1 Medium

Term

Functional

Budget management

system

Variance analysis of major

expenses to be undertaken

for actual expenses Vs.

Budget approved during

financial year.

Nil Better control over

operational and non

operational

expenses.

Short (at Most 6

months for the

hiring of the budget

officer)

DGM Finance

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1.4.6. IMPLEMENTATION IMPERATIVES AND ENABLERS

Issue Management of ASEB AEGCL Regulatory commission Government of Assam

Organisation

autonomy

Change of working

culture from reliance on

ASEB to full autonomy

with its corresponding

responsibilities

GOA to issue notification on full

autonomy of the utilities

including the management,

planning and disbursement of

externally provided funds. Such

notification could include a

transition mechanism leaving the

project monitoring function with

ASEB until such time that the

loan covenants and/ or grant

requirements are amended

Risk Management

system

• Hedging for power

procurement

• Cash in transit

insurance

Designation of an official

responsible for Risk

Management function

and a system of risk

identification and

analysis

• Regulator to allow the recovery

of insurance premium through

tariff

• Regulator to allow automatic fuel

surcharge for the additional

power purchase cost.

Fund Management

system

Payment of GOA

loan.

Dismantling of

Centralized Cash

Management System

Preparation of restructuring

plan

ASEB to adopt hands-off

policy on the utilities’

financial operations and

policies

Adjustment to separation Recovery of financing charge

through the tariff

GOA approval and notification on

the loan restructuring.

Budget Management Training of officials and

staff on the application

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Issue Management of ASEB AEGCL Regulatory commission Government of Assam

System.

• Variance analysis of the Actual vis-à-vis Budget approved

of the ERP

Working Capital Management

Leadership and advocacy

of the Board of Directors

and top management

Inventory Management system

Training of work force on

the application of SAP

Regulator to allow the

expenditure

Procurement Management System

• Adoption of Rate Contract mechanism

• Bulk purchase

Leadership and advocacy

of Boards of Directors

and top management

Staff Capacity building

on inventory

management

1.4.7. PERFORMANCE MONITORING INDICATORS/CRITERIA

Various parameters used by the utilities for measurement of performance are listed as below.

Area Performance Measure Units of Measurement Formula (If Any)

Organisation autonomy Financial Autonomy of AEGCL - -

Risk Management system

Adoption of structured risk identification and mitigation process

Adoption of insurance cover for network and employee’s

• Number of new risks identified in various

categories.

•

• Cost of medical insurance per employee.

•

• Insurance premium as a percentage of

Number

US Dollars

Percentage

-

-

(Total Insurance Premium / Cost of

Assets)*100

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network assets.

•

• Percentage of assets covered under insurance.

Percentage

(No of assets insured / Total no of assets)*100

Fund Management system

Restructuring of GOA loan

• Average cost of restructured loan.

• Penalties incurred.

• Debt service coverage ratio.

• Interest paid/Incurred vis-à-vis interest allowed by regulators.

US Dollars

US Dollars

Number

US Dollars

-

-

Net Operating Income / Total Debt Service

-

Budget Management System.

Adoption of CO module (ERP)

for budget and cost control.

Variance analysis between

Budget and actual expenses.

• Actual expense as a percentage of budgeted expense.

Percentage (Actual Expense incurred / Budgeted Expense)*100

Working Capital Management • Working Capital Ratio

• Average days receivables

• Float time between cash collected and credit allowed by bank.

• Cash handling charges

Value

Days

Days

US Dollars

Current Assets/Current Liabilities

Average Accounts Receivable / (Sales x 360 days)

-

-

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Inventory Management system

Adoption of ERP module for

inventory management system

• Inventory Turnover Ratio

• Number of stock out

• Number of slow moving item

• Number of non-moving item

• Aging of inventory

Value

Value

Value

Value

Days

Cost of goods sold/Average inventory

-

-

-

-

Procurement Management

System/Capital Expenditure

Management

• Average cycle time for procurement

• Average time of ordering/release of

purchase order (PO)

• PADCI (Project Average Duration

Completion Index)

• EADCI (Engineering Average Duration

Completion Index)

• Average time taken to capitalise from date

of completion of work

Days

Days

Days

Days

Days

-

-

Sum of time required to close each

scheme / total number of schemes

Sum of time required to release each

scheme / total number of schemes

Sum of time required to capitalise each

scheme / total number of scheme

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1.5. 10 YEAR BUSINESS PLAN

This part of the study is geared towards an assessment of the utilities’ internal capacity to undertake

sound financial planning particularly capital investment planning. Capital budgeting is of paramount

importance to capital intensive industries with large sunk costs such as APGCL, AEGCL and APDCL. It

is at the core of their business plans; and determines their efficiency, profitability and long-term

survival.

The assessment of the utilities capacity to undertake financial planning was to have been through a

diagnostic approach, specifically through a case study. This would have involved first, asking the

utilities to draw up the Financial Model of their current and projected business plans based on a

Template that was provided (Chapter XI, sections 1.3, 2.3, and 3.3 of Inception Report); second,

verifying the link between their Capital Investment Plans (hereinafter referred to as their CAPEX

plans) in particular, in terms of the assumed financial impact of the CAPEX plans on their profitability

over a 10 year period; third, by evaluating the financial criteria used in the prioritization of the

projects included in the CAPEXA plans; and finally, identifying the possible gaps and weaknesses in

both the capital investment plan and over-all financial plans. Since the Financial Models could not be

accomplished in time for this report; an alternative approach was taken, i.e.; through an analysis of

the utilities available business plans and CAPEX plans. The CAPEX plans analysed were those

submitted to the regulator by all the utilities in their tariff petitions and Detailed Project Reports

(DPRs) of projects prepared for externally funded projects of AEGCL.

1.5.1. GAP IDENTIFICATION AND ANALYSIS

The alternative approach turned out to be inadequate for the purpose of this Analysis. First, the link

between the business plans and CAPEX plans could not be verified from the available documents;

second, the DPRs were sponsor specific, i.e. projects were grouped by sponsor and evaluated

separately from other projects with different sponsors; third, the CAPEX plans submitted to the

regulator did not contain the results of the financial evaluation that may have been undertaken that

formed the basis for their inclusion in the plans. AEGCL’s current multi-year investment plan is briefly

described below. The project team eventually found, from discussions with various utility staff and

PMU and from the documents that were made available that: a) capital investment planning continues

to reside with ASEB because capital investment projects are still largely funded by external schemes

where funds are funnelled through ASEB; b) there is no evidence that the capital investment project

proposals submitted through ASEB underwent economic evaluation where technical project ideas or

alternatives were evaluated prior to final selection of the project proposed to be funded; c) both

technical and economic evaluation capacities for capital investment planning are largely absent from

all 3 utilities; d) the utilities’ Business Plans were prepared by external experts and few , if any,

among the utilities’ staff were familiar with them.

1.5.2. BENCHMARKING PROCESSES AND STANDARDS

Benchmarking for this activity is guided by the project objective to Strengthen and develop the

capacity of the utilities in:

• Capital investment planning in respect of the evaluation of capital investment projects –

cost/benefit analysis, payback period, present value, etc.;

• Preparation of detailed business plan for each company consisting of capital investment plans

and future profitability statement.

It is clear from the foregoing that the project objectives and scope of activities to be undertaken

themselves already describe the benchmarking process and standards which is capacity building. The

required expertise are imperatives in all well run undertakings that involve substantial investment on

fixed assets, not just in electric power utilities. Furthermore, the techniques applied for economic

evaluation and preparation of financial plans are “textbook approaches” that are fairly well known and

applied. Hence, describing the best practices of national and international comparators will be

extraneous to and will not add value to this project activity.

1.5.1. AEGCL MULTI-YEAR INVESTMENT PLANS

AEGCL’s Investment Plans as submitted in its tariff petition to the AERC are reproduced in the tables

of annex VIII .4 The investment projects are classified into R & M; Complete Projects; On-going

4 APGCL ‘Petition for Approval of ARR for 2010 to 2012-13 and Tariff Proposal for the Financial Year 2010-2011

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Projects; New Projects and Development and Implementation of Joint Venture projects. The project costs are broken down by source of funding and type of financing, i.e.; whether grant or loans. A status report on the projects that were also submitted describes in detail the technical justifications for undertaking them, e.g., to improve reliability and/or load factor, to replace aging plants. The status report also informs of the submission of separate Detailed Project Reports (DPRs) to each of the project(s) sponsors/financiers. As shown in a DPR submitted by ASEB for ADB funded projects this report details the expected cash flow and NPV over the life of the project(s) to be funded by that sponsor

5.

1.5.2. ACTION PLANS

The scale of the gaps identified convinced the Consultant to adjust the approach to this activity. It was initially planned that the utilities will draft their capital investment and business plans on their own based on a template to be provided by the Consultant. This approach was subsequently deemed to be ineffective relative to the scale of the skills deficiency and prompted a change in strategy to a ladderized approach that includes:

a) Briefings on basic technical project evaluation for generation, distribution and transmission;

b) Briefings and workshops on the economic evaluation of capital investment projects and on business planning; and

c) In coordination with the PMU, the formation of ad-hoc teams consisting of engineers and accountants/finance staff in each utility that were trained on the basic aspects of capital investment and business planning;

d) ‘Learning by doing’ to develop the staff’s confidence on their ability to undertake these functions by encouraging them, with close assistance and supervision to actually work on their computers and as a team (the project team made available its own laptop for those without);

e) Initially focussing capacity building on the evaluation of Capital Investment plans due to the substantial effect of these investments on the utilities revenue and thereafter, on the Business Plans;

The preparation of the 10 year Business Plans, particularly of the 10 year financial plans is constrained by a) the lack of experience of the utilities’ staff with business plan preparation and; b) the absence of corresponding 10 year capital investment plans ; a critical input to the business plan. To overcome these constraints, the project team decided to approach the preparation of the plan: a) as a capacity building exercise by practical assistance, i.e.; provision of guidance and constant consultation during the experts’ stay in the project office and by electronic communication when the expert was not in Assam; and b) where it was not possible to come up with a 10 year capital investment plan; by allowing the preparation of a Business Plan for a shorter time period. So far, only AEGCL has indicated that it will prepare a Business Plan for 5 years only; APGCL and APDCL are drafting 10 year plans. This exercise was not expected to result in Business Plans that the utilities can take to the bank. Instead, they should be viewed simply as outputs of capacity –building activities based on readily available data and convenient assumptions for the purpose of learning. The utilities will require a more extensive training on Business Planning to produce credible Business Plans, which is being recommended in the TNA part of this report. The exercise has nonetheless shown the staff that it is possible to undertake this function by them and made them receptive to this possibility provided that they are equipped with the technical skills to undertake it.

The briefing on first item above was held in Guwahati on February 24, 2001. The ad-hoc group was formed shortly after. It was at their request that a complimentary briefing on the technical evaluation of transmission and generation projects was held in Guwahati in April 2011.

1.5.3. CAPACITY BUILDING ON ECONOMIC EVALUATION OF CAPITAL

INVESTMENT AND PREPARATION 10 YEAR BUSINESS PLANS

a) Technical Evaluation

Technical evaluation precedes the economic evaluation of all capital investment projects. It involves the gathering of pertinent data such as load flow; load modelling; load forecasting; performance assessment and/or audit of plant and systems vis-à-vis relevance standards such as availability, outage probability, reliability, safety, security; the generation of project ideas and the technical evaluation of the project ideas in terms of their ability to respond/solve the problems to be addressed

5 ASEB ‘Detailed Project Report ‘Energy Efficiency Enhancement Project of Assam, March 2009’

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or the technical objectives that are sought to be attained. This flow is illustrated in the Distribution

Planning Chart below. A briefing on the technical evaluation of distribution and transmission projects

was provided by the expert to the utilities’ staff in the February and May workshops to provide

context to the capacity building exercise on the economic evaluation of capital investment projects. In

brief, it was intended to impress on the utilities that the economic evaluation is to be applied on

alternative project ideas to aid in the selection of the final project proposal and not on the final

project proposals already as now practiced by ASEB and the utilities. As previously observed, the

capacity for technical evaluation among the utilities’ staff (and even in ASEB) is very much lacking.

Capacity building will involve lengthy rigorous training. To be effective such training should be

designed as an interactive activity where the core training materials will consist of the utilities’ own

data (from plants and systems) and the laboratory exercise will focus on the development of the

utilities’ capital investment plans. Such training could run anywhere from 3 to 6 months and require

that the training be conducted outside the trainees’ offices to enable them to focus and not be

distracted from the daily demands of their jobs.

b) Economic Evaluation

The economic evaluation of capital investment projects of electric utilities, especially distribution and

transmission, must be aligned with the performance and service quality standards imposed by the

regulator. In general, projects that are for compliance with the minimum standards are evaluated

based on least cost while those that will allow the utility to exceed the minimum standards are

evaluated based on their relative NPVs, IRRs, cost/benefit; i.e. the alternative with the higher NPV,

IRR or cost/benefit is selected. This selection criterion is illustrated in the diagram below.

DU CAPITAL INVESTMENT PLANNING PROCEDURE

Demand, Sales, customer, economic,

demographic, fault, reliability, ERC DSL

Segregation Data (network & load)

Data Gathering and Updating

Forecasting

Performance Assessment of

Distribution System

Technical Evaluation

Formulation of

Alternatives/Project Formulation

Economic Evaluation

Demand, Sales and Customers

Identify and quantify Capacity, Safety,

Power Quality, Reliability and System Loss

problems

Generate Project Ideas

(Solutions to Problems)

Short Circuit, Load Flow, Reliability and

System Loss Analysis

Least-Cost, NPV and B/C Analysis

1

2

3

4

5

6

CAPITAL BUDGETING

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The preliminary screening of Generation expansion projects on the other hand are usually evaluated

with a screening curve. This methodology allows the determination of the optimal capacity mix by

discounting the total Levelised cost during the operating life of the projects against their capacity

factor values and by dividing the annuity of their production costs by their annual generation. In the

event of projects with dissimilar lives, the equivalent annual annuity approach is used to evaluate the

projects. Non-generation expansion projects such as plant refurbishment, installation of system

hardware and software, investment on new buildings and maintenance vehicles are directly evaluated

using the least cost method. These approaches to economic evaluation was discussed and

demonstrated to the ad-hoc teams during the briefings and workshops in February and May. On the

application of the screening curve, the AEGCL team informed the group that based on existing policy,

only hydro and natural gas based projects were to be considered in the planning for generation

expansion.

c) Results

The first briefing on technical and economic evaluation of capital investment plans and business plans

was held in Guwahati on February 2011 and a second briefing-cum-workshop was held in May 2011.

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A backgrounder on the technical or engineering process on capital investment planning was provided

to demonstrate that economic evaluation involves the evaluation of alternatives, prior to the selection

of the final project proposal. Due to the unavailability of data from the utilities, the briefing made use

of extensive data from a Philippine distribution utility to demonstrate the detailed procedures involved

in the evaluation of capital investment projects and their effect on a utility’s finances. The participants

were, through the PMU, provided soft copies of the presentations and the Excel Worksheets with

embedded formulas immediately after the briefing. It was then agreed that the utilities would, on

their own and coupled with constant communications with the expert to resolve difficulties if

necessary, evaluate their capital investment plans and submit the results to the expert by the end of

April 2011. Inasmuch as there was no record/documentation of alternative project ideas that may

have been considered prior to the finalization of the utilities’ current Capital Investment Plans, it was

agreed that the staff would simply work on the current approved projects, i.e., for submission to

possible financiers, as a learning exercise on economic evaluation. A Workshop would then be held in

May 2011 in Guwahati to finalize the economic evaluation of the capital investment plans and to draft

the business plans. The formation of the ad-hoc teams was agreed with the PMU prior to the expert’s

departure from Guwahati in April.

Outputs were not submitted to the expert at the end of April, as agreed which served to push back

the agreed timetable. Except for AEGCL, the ad-hoc teams did not work on their assignments despite

the constant follow-up by the project team and had nothing to show by the time the expert returned

to Guwahati in May. Among the reasons cited was the lack of specific briefing on the technical

evaluation of capital investment projects for transmission (which does not explain the lack of results

for APDCL and the progress of the AEGCL team). In response to the request for a briefing on technical

evaluation, the expert provided a briefing on the technical evaluation of transmission projects with

the usual caution to the participants that she was not competent to engage in an in-depth discussion

on the technical aspects of the subject. Thus, instead of finalizing the capital investment and business

plans in May, the Workshops again focussed on capacity building on the economic evaluation of

capital investment plans and the preparation of business plans.

As a result of these delays, experts went back to Guwahati in July (11th July 2011 to 23rd July 2011),

November (13th November 2011 to 27th November 2011) and in February to assist the utilities in

finalizing their Business Plans.

d) Economic Evaluation of Capital Investment Plans

The briefing/workshop materials are attached as Annex VIII 1 to this Report.

Based on the results and the interaction between the expert and the ad-hoc teams, it appears that

the repeated Workshops succeed in building the capacity of the ad-hoc teams to undertake the

economic evaluation of capital investment projects. However, for this knowledge to be enhanced it

needs:

• To be complemented with rigorous training on the technical evaluation of proposed capital

investment projects;

• To be applied by involving the ad-hoc team of the utilities in the generation and evaluation of

project ideas and the selection of final project proposals through the formation of permanent

capital investment planning teams in each of the utilities ; and,

• To be dispersed by requiring the members of the ad-hoc teams to conduct ‘echo’ sessions for

other concerned staff in the respective utilities, particularly those who are expected to be

involved in capital investment planning.

• The capacity building exercise also made the participants appreciate the importance of

clarifying the technical assumptions underlying their projects; e.g.; on the level of operating

and maintenance expenses; assumed benefits such as increased load or decreases in systems

loss; cost of capital, among others. In the case of APGCL where the economic evaluation

yielded mostly negative NPVs and IRRs that were below the cost of capital; it made the team

aware of the importance of cost reflective tariffs and the urgency of exploring alternative

approaches to ensure that the utility’s ROE that is built into its tariffs allow the utility to be self-

financing and sustainable in the long run. This complication faced the AEGCL team in drafting

its Business Plan.

e) Results (Details included in Annex VIII 2)

Result: 10 Year Draft Business Plan of AEGCL is attached as Annex VIII 2 attached.

It is only around 30% complete. For the most part, action details are still to be identified while a draft

of the Financial and Organization Plans has yet to be written. The draft Financial Plan is based on

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historical growth patterns only and does not cover the corresponding funding requirements to

implement the action plans in the business plans. Despite this observation that was pointed out to the

Ad-Hoc team, the Financial Plan was not amended.

f) Observations

Its inability to formulate a complete draft was due to the shortage of staff assigned to the Ad-Hoc

team. AEGCL had only 1 AGM technical and 1 Senior Accounts staff working on it although the team

were authorized to solicit inputs from other staff.

g) Implementation Imperatives and Performance Monitoring Indicators

Building the internal capacity of the utilities for capital investment and financial planning will require

the following:

• Formation of a technical team in each of the utilities that will be responsible for these tasks;

• Sustained and in-depth capacity building on all aspects of capital investment and financial

planning such as forecasting; technical evaluation; and financial analysis;

• Devolution of the management, planning and control of externally provided funds for capital

investment and grants, loans, among others from ASEB to the utility. This is essential

because skills are only acquired and harnessed by doing. To be consistent with the terms of

the current loan and grant agreements that designate ASEB as the executing agency, ASEB

can continue to monitor the utilisation of the funds and require the utilities to regularly submit

project update reports for this purpose.

The performance-monitoring indicator should ultimately be the completion of sound capital

investment and financial plans that are based on robust assumptions and rigorous technical and

economic evaluation. For the purpose of this project, the performance monitoring indicators will be

much less ambitious given the current capacity of the utilities and the dearth of technical data on

which to build the plans. Thus, the performance monitoring indicators for this project are: a) drafting

of the capital investment and financial plans according to the guidelines provided in the Workshop;

and b) Capital investment and financial plans that are consistent with the data sets and assumptions

on which they are based. Simply, the expected result from this intervention is ‘learning and

knowledge ’to equip the utilities’ staff to draw up their plans in the future; not capital investment and

financial plans that the utilities can take to the bank.

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Assam: Capacity Development of the Assam Power Sector Utilities – Final Report – Transmission IV-86

IV AEGCL-HUMAN RESOURCE MANAGEMENT


STANDARDS


The key objectives of the As-Is Human Resources Management Assessment are:

1. To make this assessment with reference to, the key guiding HRM principles to determine

successful unbundling, as outlined in the Inception Report:

• The achievement of separate entities with appropriate autonomy and enhanced accountability

to their respective targets, as well as strengthening of their competitive capacity

• Enhanced role of the Human Resources function/processes in providing strategic and proactive

support and service to the organizations in the effective management of its human resource

• With the approved organization structure (reflecting appropriate levels of accountability and

authority) as the reference point, all vacancies to be filled with qualified staff

• Moving to a performance based organization

• Staff that is motivated and engaged, including strong commitment to achieving the goals and

targets of the new independent companies

2. To make this assessment in the practical context of focusing on areas and issues where this

consultancy can make a practical and sustainable difference.

3. To make this assessment with due consideration of another principle contained in the Inception

Report, namely that the HRM element of this consultancy must be synergistic with the overall

context and scope of Technical Assistance (TA) of ADB, and build on the work of previous

consultancies to support the functional unbundling and autonomous decision making of the

Assam power utilities by 2014

4. The scope and coverage of the section is: to assess as much as possible the status quo of the

three entities in terms of: (a) organizational structure, (b) HR management and Policies and (c)

Training management processes and Policies

To reference, the list of HRM elements outlined in the Inception Report are:

• Capacity of HR Function

• Manpower Planning System and Manpower Norms

o Manpower norms for key processes(including ratio of Executive to non Executive;

number and level of posts)

o Current Status on: Positions Sanctioned to Positions Filled (Executives), new

vacancies and vacancies arising from superannuation; skills and number mismatch;

system of annual approval and sanctions

Standard manpower modules /defined manpower norms for Generation (Main Plant; Off Site, etc.),

Transmission (substation; transmission lines construction and operation & maintenance) and

Distribution

• Recruitment and Selection

• Employment Conditions

• Performance management

• Succession Planning

• Basis of promotions in the Executive category - Any fast track promotions; Average years spent

in each grade (for executives)/ minimum period of service in the grade to be considered for

promotion to the next grade

• Job description/ job specification for executive and non-executive positions

• Cadre schemes

• Classification and grades: number of pay grades and levels in the current executive

cadre/hierarchy.

• Rewards system/financial incentives linked to performance

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• Employee Training and Development

• Employee Communications

• Compensation structure; any other comparative considerations

• Human Resources Information Systems (including data on skills, knowledge, retirements etc.


Of primary importance in proceeding with the HRM, training and capacity building elements of this

consultancy is to establish some form of HR steering grouping in each company to facilitate,

coordinate and oversee all the changes required. This steering group should: (a) have a clear

mandate (tasks, approval and reporting requirements, development of action plans, etc.); (b) have

people who can dedicate time and not be hampered by availability issues for work and meetings;

and(c) have representation of PMU. This group’s action plans should contain measureable targets and

indicators that would become part of the performance measurement regimen of this project.

As specified previously, there are five main guiding principles driving the HRM component of this

project. To realize the ultimate goal of successful unbundling and to achieve optimal sustainable

performance in the three companies, there are a number of indicators the consultants are using for

each of the five HRM principles:

1. The achievement of separate entities with appropriate autonomy and enhanced

accountability to their respective targets, as well as strengthening of competitive

capacity

• Each company should have a process for developing and approving organization structure(s)

Measurement Indicators:

o Process fully described (who, what, when, why, where)

o Process involves input of HR expertise (item 2.below)

o Process involves input from and coordination with other components of the consultancy

(as-is organizational structure analysis for the three companies)

o Specific measurement indicators part of the process, i.e. flow from the process for

developing and approving organization structure(s)

• Organization structures (charts) reflecting both appropriate autonomy and enhanced

accountability are approved


o Appropriate reconciliation of fast-tracked HR processes and staffing (item 2, below)

o Reconciliation of the manpower planning, training and capacity building plans of this

consultancy

o Reconciliation of the organizational conclusions and recommendations flowing from other

components of this consultancy (business plans, business process action plans)

o Reconciliation of best practices and national electricity sector benchmarks (including

attention to structures that are proven to improve competitiveness)

• Job descriptions for all key management positions that mirror what is reflected in the

approved organization charts are developed and approved


o Adherence to the HR process for job description preparation (item 2. below)

o Specific measurement indicators part of the process, i.e. flow from the job description

process.

• An implementation plan for moving from status quo organization to new organization is

developed, approved and executed


o Implementation plan fully described (who, what, when, why, where)

o Reconciliation of the manpower planning, training, capacity building and communications

plans of this consultancy

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o Specific measurement indicators part of the implementation plan, i.e. flow from the

implementation plan.

• New organization charts and implementation plan are effectively communicated to those that

need to know


o Verification that all those who need to know are covered per the implementation plan

o Dovetail with communications and stakeholder consultation plans of this consultancy

2. Enhanced role of the Human Resources function/processes in providing strategic and

proactive support and service to the organizations in the effective management of its

human resource

There are two important measurements for the enhancement of the HR function, staffing

vacancies, performance review, and staff motivation/engagement: measurement of process-

oriented development and measurement in terms of on going ultimate HRM metrics that should

ultimately form part of the management of human resources in each company. In most cases

these ongoing measurements are contingent on HR processes first being in place

• Generic strengthening of the HR function


o Executive Director (HR) level position in each company(2014)

o Plan to recruit/ develop people from within to staff this Executive Director (HR) level

position

o Plan to recruit/identify and develop people from within to staff existing key HR positions,

as well as emerging positions resulting from new HR processes

• Development of a Job Description process


o Job description formats aligned to appropriate levels of skills, knowledge, competencies,

responsibilities etc.

o Guidelines for preparation of job descriptions (who, when, how, approvals etc.)

• Development of a process to monitor and communicate Sanctioned Posts lists

Measurement Indicators

Linked with budget and approval protocols for filling posts

o Method for ensuring appropriate people are placed

o Who monitors

o Ongoing communications procedure (how and when)

• Development of HR function practices to support the process (as above) for both developing

and approving the organization structure and approving related sanction posts list.


o who, what, when, why, where

• Development of HR function practices to support the process (as below) for Performance

Review



• Development of HR function practices to support the process and activities (as below) for

motivating and engaging staff committed to achieving the targets of the companies



• Development of a Manpower Planning process


o Provision for internal information: succession, retirements, personnel inventory (skills,

competencies, training, education) incumbency data, organizational development

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o Provision for external information: labour market trends

o Linkage to GOA policy

o Decision making and approvals in planning

• Development of a Training process


o Training needs assessment (TNA)

o Reconciliation of available internal and external source/ resources

o Planning protocol

o Advisory and decision making protocols

o Linkage to budgeting process

o Policy

o Linkage to employee development and performance review

o Reconciliation of all aspects/levels of training (induction, technical, management,

customer relations, professional etc.

• Ongoing/ultimate HRM Metrics


o Revenue per employee (revenue ÷ total # of employees)

o Tenure (average # of years of service at the organization across all employees)

o Training/development hours (sum of total training hours ÷ total # of employees)

o Absence rate (# days absent in month ÷ (average # of employees during a month x # of

workdays)

o Compensation or benefit revenue ratio (compensation or benefit cost ÷ revenue)

o Turnover costs (total costs of separation + vacancy + replacement + training)

o Benefit or program costs per employee (total cost of employee benefit/program ÷ total #

of employees)

o Salary compensation as a percent of total compensation (annual salary ÷ total

compensation (salary + benefits + additional compensation)

o Benefits as a percent of salary (annual benefits cost ÷ annual salary)

3. With the approved organization structure (reflecting appropriate levels of

accountability and authority) as the reference point, all vacancies to be filled with

qualified staff

• Process Measurement: Covered above with respect to the development of a process to

monitor and communicate Sanctioned Posts lists



o Cost per hire (recruitment costs ÷ (compensation cost + benefits cost)

4. Moving to a performance based organization (from a seniority based one)

• Development of Performance Assessment Linked Motivational Schemes


o Schemes that have been successful in other electricity reform in India

• A Performance Review system linking performance to organizational goals, promotions and

salary


o Specific measurement indicators would be contained in (flow from) the aforementioned

process implementation plans

o Process architecture appropriately aligned to levels of skills, knowledge, competencies,

responsibilities etc. (including forms and documentation aligned accordingly)

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o Process ensures appropriate collaboration between (and input from) both the appraiser

and appraise,

o Process fully describes and documents the steps and participants (including support role

of HR function, reviews, approvals etc.)

o Process provides for appropriate record system

o Process ensures measurement of all aspects of performance: company goals,

departmental goals, quantitative targets, job description requirements, people skills and

behaviour, team skills etc.

o Process provides focus on development (future orientation) as well as performance per se

(backward orientation)



o Percent of performance goals met or exceeded (number of performance goals met or

exceeded divided by total number of performance goals)

o Percent receiving performance rating (total of employees rated under a given score or

rating on their performance evaluation divided by total number of employees

5. Staff that are motivated and engaged, including strong commitment to achieving the

goals and targets of the new independent companies

Note: Measurement of this factor should be in stages (immediate project related and longer run

on going) and should come from project specific indicators as well as outputs of new HR

processes.

• Goals of each company are clearly communicated to all staff (measured by an audit of

communication of goals to staff)


o Targets of the project Communications Plan are met

o The aforementioned HR steering group/committee audits communications, including

insurance that communications are appropriately tailored to levels, categories and types

of employees

• Employees are achieving individual targets that support utility goals and targets


o This measurement could only come after implementation of new HRM/Performance

Management processes referred to in item 2. above (presumably priority/urgent or short

run)

• Employees are motivated and engaged


o This measurement could only come after implementation of new HRM processes referred

to in item 2. above (presumably longer run and sustainability)

• Develop or purchase short-run quick-win surveys to measure employee motivation and

engagement


o Results of such surveys



o Engagement or satisfaction rating (percent of employees engaged or satisfied overall or

with a given aspect of the workplace)

o Ultimate indicators/measurements of employee motivation and engagement should

involve surveying staff on the following 12 questions:

1. Do you know what is expected of you at work?

2. Do you have the materials and equipment you need to do your work right?

3. At work, do you have the opportunity to do what you do best every day?

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4. In the last seven days, have you received recognition or praise for doing good

work?

5. Does your supervisor, or someone at work, seem to care about you as a person?

6. Is there someone at work who encourages your development?

7. At work, do your opinions seem to count?

8. Does the mission/purpose of your company make you feel your job is important?

9. Are your associates (fellow employees) committed to doing quality work?

10. Do you have a best friend at work?

11. In the last six months, has someone at work talked to you about your progress?

12. In the last year, have you had opportunities at work to learn and grow?

1.3. ASSUMPTIONS

As previously discussed, the “Human Resources Management (HRM) Assessment” component of this

project is critical to the achievement of the operational reform objectives of the three entities

involved in this consultancy. Hence it is important to outline the major assumptions made by the HR

consultants in proceeding with their work.

1.3.1. INTERNAL

• The overriding assumption is the pursuit of the five key guiding HRM principles outlined

previously in the section on the objectives to the as-is analysis.

• Given the magnitude and complexity of changes, and improvements in HRM, it is critical for

both analyses and recommendations to be practical, do-able and appropriately simple. Proper

sequencing, taking into account the status quo versus end positions, will be the key to

successful and effective change. Hence the consultants will focus on areas and issues where

they can make a practical and sustainable difference.

• The consultants must rely on available input and documentation. Given the structure of the

project this will be gleaned over a short period of time with the cooperation of staff from the

three companies. It is assumed that the documentation received and the input from staff,

when reviewed in conjunction with the reports and work of previous recent consultancies, will

provide a sufficient indication of the status quo and point to effective HRM, Training and

Capacity Building recommendations.

• As with any HR reform of this type, it is assumed that a holistic approach is required. The

integral relationship and inter-play between organization, process, policy and staffing dictate

this.

• As pointed to previously, it is assumed that an effective strategy for reform will take advantage

of, and reconcile as much as possible, the work and recommendations of other consultancies

that were involved with the Technical Assistance (TA) of ADB.

1.3.2. EXTERNAL

• The HR reforms should follow as much as possible, within the bounds of practicalities (per the

second internal assumption above) the best practices of other electricity utilities in India,

including as applicable, how they implemented their reforms.

• The HR reforms should follow as much as possible, within the bounds of practicalities (per the

second internal assumption above) international HR best practices.

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1.4. AS-IS ANALYSIS

1.4.1. ORGANISATIONAL STRUCTURE

The assessment of the organization structure was based on the organization charts per se and supporting documents such as sanctioned posts lists and the PWC

organizational proposals, as well as input from staff of the three entities. The consultants followed as much as possible the steps outlined in, and referenced the

anticipated outcomes listed in, the Inception Report.

Table 15 - Organization structure As-Is analysis

Key Element As-Is Analysis Consequent Suggested Considerations

Approved Structure and Current

Status

TRANSCO (AEGCL)

The AEGCL Board of Directors in effect approved the

organization chart on February 24, 2006. A document

provided by the DGM (HR) on November 2, 2010 outlines

sanctioned posts.

Based on finalization of organization structures to develop

processes to ensure :

Staffing the structure(per sanctioned posts)

Criteria for assigning existing personnel to new posts

Identify gaps and plan recruitment

Ensure that organizational analysis and development is done in

a holistic manner such that all factors of coordination and

interplay are taken into account

Linkage of organizational structure and supporting documents

(sanctioned posts, job descriptions etc.)

Use of analytical work and recommendations of PWC report

As reform progresses ensure “developing” HR processes are

described fully and are carefully aligned to organizational

structure development

Ensure sanctioned posts related to the organization structure

are listed and that there is a system to monitor and record

periodically the status of filled posts (vacancies)

1.4.2. HR MANAGEMENT AND POLICIES

The assessment of HR Management and Policies was based on documents obtained and interviews held with staff of the three entities (including the PMU) during

the Inception mission. The consultants followed as much as possible the steps outlined in, and referenced the anticipated outcomes listed in, the Inception Report.

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Table 16 - HR management and policies As-Is analysis


HR Policy The consultants were informed that presently HR policy

is the same across all three entities. The most relevant

existing document describing HR policies is “The Assam

State Electricity Board Employees’ Service Regulations”

dated 1960. There have been, as to be expected, many

amendments since 1960 which have not been codified

into a composite document.

• Clarify existing/current policies and summarize/codify into

user friendly format, ensuring they accurately describe

existing HR processes and practice.

• Develop new policies required to: (a) reflect contemporary

HR best practices (i.e. policies reflecting a strategic,

proactive and transformational HRM function) and (b)

accurately describe and support new HR processes

• On new processes [e.g. training,, employee development,

promotions & performance management (in the long run)]

keep policy per se simple, succinct and generic until process

refinement is achieved

• Ensure policy is realistically aligned to and supports existing

and emerging processes

• Avoid convoluted and overly detailed policy statements

• Taking into account the individual needs and roles of the

three companies (including support of business

goals),develop policies that appropriately apply to each of

the three companies

• Ensure appropriate consultation with all relevant

stakeholders

• Clear and appropriate protocol for finalization, approval

communication and monitoring of HR Policy (including on

going revision)

• In developing policy ensure consistency between documents,

nomenclature, titles, levels, organizational units etc.

HR Function (CADRE) • Shortage of qualified HR staff

Development of new HR processes to more effectively

manage the human resources and to support them in

achieving their short and long term goals (including

requisite staffing needs at strategic levels)

As indicated previously the “Human Resources Management

(HRM) Assessment” component of this project is critical to

the achievement of the operational reform objectives of the

three entities involved in this consultancy. It is important to

at least get the appropriate HR people and expertise in place

to guide and facilitate both the HR related changes involved

in this consultancy as well as the development of the

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Note: There are new HR processes that will need to be

addressed such as:

Staffing of Existing Sanctioned Positions

Manpower Planning

Succession Planning

Recruitment

Performance Management

Employee Communications

Human Resources Records and Information Systems

(HRIS)

There is a lack of strategic perspective with regard to

how each company manages its human resources,

insofar as it has limited professional HR functionaries;

and was headed at the level of DGM(till very recently).

The consultants were informed that there is a good

supply of qualified HR people in the Guwahati labour

market.

As indicated in the as-is organizational section, the PWC

2010 report offers some pertinent recommendations

around enhancing the HR organizational structure to

reflect a needed and more transformational (proactive

and strategic) role for HR.

concomitant HR processes themselves.

• Identify/describe in detail the HR expertise required for both

the short and longer term (quantity and quality)

• Identify all available resources to achieve the

aforementioned expertise: existing staff, qualified people in

the labour market (locally and if necessary nationally),

possible potential for contracted out services as needed,

training resources that could be used to augment skills and

knowledge of existing staff etc.

• Develop/establish some form of HR Develop some form of

steering group/committee to facilitate, coordinate and

oversee all the HR changes required in this consultancy,

ensuring : a clear mandate (tasks, approval and reporting

requirements, development of action/work plans, etc.)

• Ensure that appropriate attention is provided to the

strategic, transformational and proactive role that Human

Resources Management should play within each company.

• Ensure appropriate and careful attention to new process

development, and in so doing avoid unnecessary and

piecemeal “bureaucracy and red tape”. New processes

suggested for strategic/timely development and

implementation:

• Staffing

• Manpower Planning

• Recruitment

• Performance Management

• Employee Communications

• Human Resources Records and Information Systems

(HRIS)

• Ensure HR processes serve corporate purposes, use “line

management” as well as “staff management” people as

partners in the process and fully utilize HR/ professional

expertise.

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• Follow-through on the PWC 2010 recommendations

pertaining to enhancement of the HR function.

Staffing of Existing Sanctioned

Positions

Based on the inputs and documents provided to the

consultants a number of weaknesses were identified in

the staffing of existing sanctioned positions:

• Many positions remain vacant at present, allegedly due

to the transitional phase of reform and lack of budgetary

resources

• There is evidently a shortage of staff in many areas

• There are numerous people at senior levels holding 2 or

3 portfolios at the same time, e.g. MD Transmission

company holding position of GM (renewable),.

Note: Clearly with this multiple portfolio situation, there

is a strain on the output of these portfolios.

• There are functional work requirements that are not

covered by existing sanctioned positions, e.g. the

transmission company has a need for a law officer but

the approved list of sanctioned positions does not

include one

Note: Most of the deficiencies in staffing identified in the as-

is analysis would be alleviated considerably by the

development of the HR processes shown as suggested

considerations (above) in the key element of development of

the HR cadre. Of particular relevance will be the Staffing and

Promotions, Manpower Planning, Recruitment and HRIS

processes. In developing these processes ensure

consideration of the following:

• Thorough records of sanctioned post staffing status available

in a timely fashion to all those who need to know (HR cadre

support staff, responsible managers, budgeting managers

and officers etc.)

• Close and thorough coordination between business planning

and budgeting processes

• Clear delineation of responsibility for monitoring/follow-up of

staffing of sanctioned posts

• Close reconciliation/linkage of staffing of sanctioned posts

with the various relevant HR processes, such as for example:

organization chart preparation, job descriptions/ job

specifications, performance review records, employee

records (performance, skills inventory, educational and

professional qualifications, work experience, training received

etc.)

Manpower Planning The following information, gleaned by the consultants

from interviews with HR executives from different

companies, signifies a void in Manpower Planning.

Lack of Manpower planning became evident, some

Note: Manpower Planning is covered above as one of the HR

processes to be developed in conjunction with the

enhancement of the HR cadre. In developing this process

ensure consideration of the following:

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examples: the current demographic data -reflects that

approximately 60% of executives are over age 50and

approximately 40% of executives will retire by 2016

A successor for a DGM (HR) was not known within a

week of his retirement.

There had been no replacement for a legal officer at

Deputy Chief Engineer level who retired in 2002,

although there was a dire need for the same.

Some skill sets are missing and there is a need for

career linked interventions (examples Manager to Senior

Manager and General Manager to Chief General

Manager).

The PWC organizational reports also identify many

factors that infer a need for the development of a

Manpower Planning system as part of HRM in the three

entities. Following are some examples for

Transmission Company:

e.g. field function executives form only 11% of total

employees working in the field

e.g. average age of staff is 51

e.g. approximately 60% of executives are over age 50

e.g. approximately 40% of executives will retire by 2016

e.g. approximately 38% of the entire workforce will

retire by 2016

Note: Closely related to Manpower Planning is Training

and Capacity Building which is covered in other sections

of this as-is analysis

• Age and service profiles

• Organization charts

• Job classification and incumbency data

• Personnel/skills inventory data

• Forecasted retirements

• Expected Employee turnover

• People utilization (productivity/cost data)

• Budgeted headcount data

• External workforce data ((Labour supply)

• Company short and long run goals (macro and micro)

• Linkage to Training and Capacity Building data and

programs

• Linkage to Performance Management data and programs

• Creation of new cadre such as- an IT cadre is required.

Recruitment

Almost all recruitment is done at induction/entry levels.

The Assam State Electricity Board Employees’ Service

Regulations” dated 1960. (Referred to in the HR Policy

element above) provide “some” procedures related to

Specifically, the following considerations should be taken into

account in developing a recruitment function in each

company:

• To review recruitment policy and provide suitable provisions

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ASEB board level selection but, as mentioned, this

document is dated 1960 and has not been kept up-to-

date with subsequent regulations.

The Draft HR Policy” prepared by SMEC dated 2007

contains a detailed set of recommendations on

recruitment policy. As indicated previously this draft

policy was done for only the Transmission company.

Undoubtedly however the contents of this will be useful.

However, at this stage, these recommendations have

not been acted on and some of its suggestions are

linked to (and will be contingent on) other HR policies

not yet developed.

to implement, where no suitable resources are available

internally-recruitment at lateral entry from external sources

• Research and reconciliation of all ongoing/available external

resources: employment agencies, media advertising, labour

supply data, etc.

• Reconciliation of all components of an effective recruitment

process: candidate attraction, employee referrals,

interviewing approaches, testing, reference checking, new

hire orientation, exit interviews etc.

• Appropriate consideration of “retention”, including

reconciliation of “retention” information/data

• Appropriate linkage to other HR processes or outputs of such

processes: Manpower Planning, Job Descriptions, Job

Specifications, Salary Administration

• Full utilization of Human Resources Information System(s)

(HRIS): individual employee data, benefits data, applicant

tracking software etc.

• Requisite budgeting for recruitment function (developmental

and on going)

Performance Management There are 5 types of appraisal forms in use (from CE

level to Jr. Engineer).

Although the form provides for measurement of

competencies and quantitative targets-it is effectively

not put to use for any purpose.

Only adverse reports (very exceptional) are used from

debarring the employee from promotion.

Analysis of the existing performance system was done

with five (5) factors in mind:

1. Process and Policy

A description of “as-is” with respect to performance

review is difficult due to the following policy issues:

• There is no approved and complete/integrated policy

Note: Performance Management is covered above as one of

the HR processes to be developed in conjunction with the

enhancement of the HR cadre. In developing this processes

ensure consideration of the following:

Develop a performance management systems that are

aligned to and support the needs of each company

As an overriding consideration, pay careful attention to

practicality, user friendliness, and implementation staging,

taking thoroughly into account available resources, existing

process and “organizational readiness”

Clear and simple communication of the process to all

affected

Develop performance parameters: core performance

competencies, job specific requirements and Key Result

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that describes the performance review process. The only

way for the consultants to understand the process was

through verbal description of practices, input that was

scant during the Inception Mission

• The only written description of process provided to the

consultants (aside from forms) was Office Order No.

ASEB (CON) 23/95/29 dated Dec.26, 1997. This order

does not go a long way to describe the process: e.g. it

describes the roles of the “Recording Reviewing and

Accepting Officers”

It is evident that there is a process in place. CGM-

HR(formerly Director Personnel ASEB is the custodian of

the of appraisal records for class I and II employees and

all other appraisal forms for class III&IV employees are

retained in the establishment sections of their respective

companies. Beyond this there is no further evidence of

the elements that would normally, in accepted best HR

practices, comprise such a process.

Note: A review of the forms involved in the process,

namely the Annual Confidential Report (ACR) for class

I&II, the ACR for class III and the Performance Report

used for all employees, provide indicators of some

serious questions and flaws relative to accepted best

practices in performance review systems: these can be

described in the remaining four (4) factors.

2. Linkage written role descriptions, business goals,

employee development

What process exists does not show evidence of linkage

to role definition documentation (job descriptions),

employee development and training documentation, nor

business, budgetary and operational goals/objectives

documentation (i.e. documentation external to and

supporting or supplementing the performance review

process)

Areas (KRAs) that are succinct and simple at first so that

they can be built on and consistent across the four entities)

In the development of all performance parameters ensure

appropriate attention to: “what is expected” (quantifiable

goals and targets) as well as “how it is to be attained”

(behavioural, attitudinal, interpersonal and teamwork

factors)

Consider the linkage between Performance and any group

incentive schemes, Job Descriptions, Recruitment ,Staffing

and Promotions

Thorough training of all main participants in the performance

review process as well as the skills required within the

process

Ensure an integrated computerized record system for the

performance component of the overall Human resources

Information system (HRIS)

Ensure the direct and indirect costs of an effective

performance management process are appropriately

budgeted

In developing a Performance Management Process reconcile

and utilize, as much as practical, the work of PWC

(Performance Management and Appraisal System 2010

report) and SMEC (draft HR policy 2007 deals with

performance and development appraisal for executives and

non-executives)

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3. Performance competencies

There is no evidence of an organized well-thought out

set of performance competencies or indicators for

different types and levels of staff

4. Training

There is no evidence of training in two key aspects: (a)

linkage of performance review to training achieved by

employees formally or informally on the job and (b)

training on the process itself

Note: One of the most critical factors in the success of

any performance management system is training to staff

on the process (forms) per se, as well as performance

concepts and indicators. The best process and forms in

the world are futile without this training.

5. Records

Although it is known that completed ACR forms are

retained there is no evidence of systematic records. This

is related to the comments in factor 2 above and

another key element involving Human Resources

Information Systems (HRIS) covered below.

Over and above analysis of the existing status, it is

significant to make mention of work done by two

previous consultancies, namely PWC and SMEC.

The Snowy Mountain Engineering Corporation (SMEC) in

its draft HR Policy issued to the Transmission company

in 2007provides a detailed set of recommendation for a

Performance and Development Appraisal system,

including forms and related competencies. More recently

in 2010 Price Waterhouse Coopers (PWC) also provided

a report with detailed recommendations on a

performance management and Appraisal System for

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successor companies of ASEB. Both sets of recommendations provide valuable input on this topic, and cover many of the five factors described above. However, the approach, process, performance indicators, forms etc. is substantially different. Perhaps even more important, neither set of recommendations provides action plans that would be critical for implementation.

Employee Communications Based on the inputs and documents provided to the consultants a number of observations were made as regards employee communications:

There is no program or system for written communications to employees (no employee handbooks, booklets/pamphlets etc.)

There are periodic forums conducted within individual companies at which the Chairman and relevant MD meet with groups of staff in “town hall-type” meetings at which the staff can participate and ask questions.

The status of the HR function (cadre) also infers that employee communications is weak

Design a simple user-friendly employee communications program that: (a) provides a mode of communications supplemental to the only present mode involving forums and open discussion meetings that could be prone to politics and union adversarial posturing and (b) provide an opportunity for the employer to systematically get across positive messages of “what it does” for the employees and how it takes into account their interests

Note: This suggestion relates to comments above dealing with the element of HR Policy

Design written material such as pamphlets/booklets that clearly, succinctly and in a user friendly manner describe all employment conditions and benefits, thereby superseding the necessity of staff (particularly relevant to those at lower levels and with relatively less education) from having to decipher and comprehend a myriad of bureaucratic memorandums, regulations, rules, revisions etc.

Ensure that any communications program is objective and transparent vis-à-vis facts

Notes: (a) At this time of change and transition employee communications is all the more important, (b) lack of clarity and misunderstanding on the part of employees fosters a poor environment to try and champion change and reform

Promotion Policy

(including cadres & promotional avenues)

1. Promotions are vacancy –linked and based almost entirely on seniority

2. Seniority is maintained within the defined cadres

Develop a promotion policy, particularly at the senior management levels ,which motivates and rewards performance, ability and experience (as opposed to only seniority) and which adheres to the following principles:

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(Electrical; Civil ; Finance & Accounting)

3. There is a unified executive cadre across the three

companies for senior executives (despite reorganization

and staff transfer scheme)-to protect inter se seniority

and promotional avenues.

This has resulted in transfers across the three

Companies and between various functions; sometimes

perhaps not fully taking into account ability and relevant

skill sets.

Further, this has often led to disregard for continuity of

service in a post. There are situations where a senior

person moves out within 6 months of assuming a

position, in case a next higher level position falls vacant.

This is an impediment for: implementing a company

specific organization structure aligned to Company

objectives; building the requisite skill sets and

competencies for the Company and taking a long term

perspective.

4. There is considerable stagnation in the same grade, for

employees. Amongst the engineers joining at the

induction level, the first promotion is after four years as

per the policy, thereafter it depends on vacancies and

could take 10 years and more for the next promotion. In

case of diploma holders, it could take 25 years in the

same grade.

is based on a mix of merit (as determined by the

Performance Appraisal System); and fulfilling minimum

length of service in the grade (specified as eligibility criteria)

provides a standard date of promotion-once a year

ensures that continuity of service is maintained

ensures some equity with respect to promotional avenues for

all cadres

Note: the policy would be subject to implementation of target

linked performance based appraisals; acceptance of ‘out of

turn’(read seniority based) promotions

In order to address concerns regarding seniority and

disadvantages in terms of promotional avenues-post

restructuring, develop a Promotion Policy that is

appropriately sequenced with transitional and longer term

implementation. Consider the following principles in the

transitional phase:

employee attains the next level in the hierarchy and benefits

assigned to higher position, despite the position actually not

existing within the structure, but the position ceases after

retirement

equity for promotional avenues in all cadres

Develop alternative reward schemes

Industrial Relations

(Union Relations)

Given the nature of union relations at ASEB and the

three companies there is no documentation that enables

the consultants to thoroughly assess this function.

However, based on the input of a senior HR executive

the following summary can be provided:

There are approximately 15 unions covering all staff

except Company Secretaries and MDs. Of these only 4

are “active”.

Negotiations with unions are not time bound and there

are no collective agreements per se. Any negotiations

Note: The culture of union relations is complex, political in

nature and entrenched. Hence this is not an area in which

the consultants in this project can realistically (as stated in

the objectives of this as-is analysis) make a practical and

sustainable difference.

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are “by issue” and conducted by the Chairman of ASEB

and the relevant MD on the one side and the affected

union on the other.

Some HR positions deal with Industrial Relations (IR)

but only routine administrative matters, not

negotiations, dispute resolution etc.

HUMAN RESOURCES

RECORDS/INFORMATION SYSTEMS

(HRIS)

Although there is evidence of “some” locally prepared

lists (using Excel spread sheets) with minimal personnel

data, there is an absence of any Human Resources

Information System(s).

As HRM, Training and Capacity Building process and program

developments proceed in this consultancy, assess relevant

information processing, data, and reporting needs for

reconciliation into the wider information systems being

worked on by IT component of this consultancy.

In conjunction with this IT component reconcile relevant and

available software to support HRM processes.

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1.5. BENCHMARKING PROCESS AND STANDARDS

1.5.1. REVIEW OF INTERNATIONAL BEST PRACTISES

As it has been pointed out in other parts of this report, effective change in the area of HRM is based

on relevance and practicality of changes, taking into account resources and organisational readiness.

Accordingly, the benchmark information presented here is meant to: (a) provide “directional” ideas;

(b) lend some credibility to the directions inherent in some of the HRM recommendations of this

consultancy and (c) serve as a useful guide to the three utilities as they embark on HRM change.

The information provided here is based on two landmark reports of The Conference Board of Canada,

the foremost independent, not-for-profit applied research organisation in Canada.

a) Valuing Your Talent (Human Resources Trends and Metrics) 2010

[Results based on 167 responses to a national survey of Canadian HR leaders in public and private

organisations]

a.1) Some general trends:

• 77% (79% private/74% public) reported that HR is more influential than on the previous 5

years.

• Most respondents believe that HR is a strategic function, and some organisations are beginning

to carry out robust workforce planning and use metrics and analytics to make linkages to

business outcomes.

• 81% of heads of corporations (CEOs) deem workforce issues as business issues.

• 72 % of most senior HR leaders in organisations report to the CEO.

• 88 % reported that their organisation’s HR strategy is aligned with and supports corporate

strategies and objectives.

a.2) HR staffing ratios reported:

Although this benchmark can vary according to the size of organisations (i.e. with the influence of an

economies of scale factor), degree of automation, geographic (i.e. extent of geographical dispersion),

sector etc., it is nevertheless universally accepted as a useful indicator.

Organisations Typology HR staff

Organisations of 500+ employees 1.25-2.14 HR staff per 100 employees

Organisations of 10,000+ employees Mean average 1.14 HR staff per 100 employees

(median 1.25)

Transportation and Utilities sector Mean average 2.45 HR staff per 100 employees

(median 2.10)

Public sector overall Mean average 2.37 HR staff per 100 employees

(median 2.26)

1.5.2. LEARNING AND DEVELOPMENT OUTLOOK2009

[Results based on 218 responses to a national survey of public and private organisations]

• 81 % of organisations in 2008 had budgets for training learning and development (TLD) [i.e. TLD

part of corporate budgeting process]

• Organisations on average spent 1.5 % of payroll on TLD in 2008

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2. GAPS IDENTIFICATION AND ANALYSIS

The gaps in both Human Resources Management and Training are a based on two considerations: (a) what was identified in the as-is analysis and reflected in 1 and (b) the key concerns identified at stakeholder meetings and interviews in January 2011.

Following is a synopsis of the gaps detected in the aforesaid report:

• Organisational - structure issues: absence of certain functions such as IT.

• Approval and implementation of recommendations on manpower (reflected in dual charge of posts at senior levels, many gaps in the staffing of sanctioned posts).No comprehensive plan in place to address- retirement in the next 4-5 years (approx. 40%of executives will retire by 2016 and an analysis of the positions/skill -sets where there will be gaps.

• Gaps in HR processes.

• Need for attention to the policy linkage between HRM and budgeting (example manpower budgets vis-à-vis utility budgets and plans).

• Dual charge of posts at senior levels and many gaps in the staffing of sanctioned posts

• Need for organised training function (training now very limited).

• There is no systematic assessment of training needs; training plan or need based annual agenda in place.

• No career linked intervention and induction level training programs/schemes in place.

• Limited training resources, nothing allocated so far in terms of budgets. No systems in place for many aspects of accepted critical components or linkages between training and other accepted critical components of, corporate training.

• Common seniority cadre across the three utilities for senior executives.

• Unmotivated staff-especially at field level, stagnation at lower executive levels.

3. KEY CONCERNS OF STAKEHOLDERS

Following is a synopsis of the findings during the meetings with the stakeholder:

• Need for enhanced training function (indicative areas being: Long Term Load forecasting ;DPR preparation & budget proposal preparation; Project Management & Monitoring; System protection & protection coordination; Condition Monitoring of substation equipments;Hot Line Maintenance training)

• Promotion policy and Reward system (attention to benchmarking utilities and consideration of time bound promotions to SE level and performance based promotions beyond this level; minimum 2 years service remaining before promotion to higher position; performance linked financial incentives/variable pay).

• Performance Management (road map for performance linked appraisal system and follow-through process).

• Strengthening of HR function, Creation of post and recruitment of a Legal functionary. Recommendations and Comprehensive Final Action Plan

The action plan that follows takes into account and reconciles a number of inputs: national and international benchmarks, gaps identification and analysis from 1, stakeholder consultations to-date and the assumptions from Interim Report 1. The reconciliation referred to includes two important factors: (a) one of the assumptions in 1.3 that “it is critical for both analyses and recommendations to be relevant, practical, and appropriately simple” and that there should be “proper sequencing, taking into account the status quo versus end positions” and (b) with respect to stakeholder consultations, the concerns of stakeholders were generally consistent with what the Consultants concluded from the as-is analysis and consequent gaps identification and analysis.

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PLAN

The action plan that follows takes into account and reconciles a number of inputs: national and

international benchmarks, gaps identification and analysis from 1, stakeholder consultations to-date

and the assumptions from Interim Report 1. The reconciliation referred to includes two important

factors: (a) one of the assumptions in 1.3 that “ it is critical for both analyses and recommendations

to be relevant, practical, and appropriately simple” and that there should be “proper sequencing,

taking into account the status quo versus end positions” and (b) with respect to stakeholder

consultations, the concerns of stakeholders were generally consistent with what the Consultants

concluded from the as-is analysis and consequent gaps identification and analysis.

4.1. SPECIFIC ACTIONS RECOMMENDED, BUDGET, AND EXPECTED IMPACT

4.1.1. SHORT TERM ACTIONS (QUICK WINS)

a) HR Steering Committee (HRSC)

This functional action is required to drive, facilitate and coordinate the numerous HRM, Training and

Capacity Building initiatives of this consultancy. Given the diversity and complexity of these

initiatives, and the fact that they involve/affect different organisational units and levels, it is essential

to have a committee that drives, facilitates and coordinates them. Additionally, the steering

committee will act as a focal point for the approval process for all initiatives.

As regards the expected impact of this action it can be said that the creation of a HRSC will provide a

focal point for all three utilities and follow-up process for the many HRM, Training and Capacity

Building initiatives essential to the achievement of the reform objectives of this consultancy. The

HRSC will not only positively impact the effectiveness of the change process for HRM, Training and

Capacity Building in the short run, but will serve the same purpose in the medium and long term as

well. The Consultants anticipate that this practical process will be helpful to the three entities in

bridging the gap between their recommendations and implementation, and ensure the on-going

momentum of HRM/Training development that will be required to enable the three utilities to

strategically manage their human resources long after the Consultants have left.

Proposed Roadmap for Establishing a HR Steering Committee (HRSC):

• Develop and obtain approval for the terms of reference and modus operandi for the HRSC (see

Annex IX 2.5). Director PMU with assistance from The Consultant to facilitate approval process.

• Create a HRSC, including appointment of members Director PMU with assistance from The

Consultant to facilitate creation process.

• Develop and commence execution of an overall HRSC communication plan that encompasses the

HRSC terms of reference/modus operandi, membership and on-going versions of HRSC quarterly

action plans:

o Should be an action in the first HRSC Quarterly Action Plan.

o Should thoroughly take into account a distribution to “all those who need to know” (senior

management, affected management, all stakeholders involved etc.)

• HRSC develops and communicates its action plans for short term and medium term (see Annex

IX 2.4 HRSC Action Plans):

o The first task of the HRSC will be to develop the first Quarterly Action Plan.

o This Quarterly Action Plan should carefully involve the role and functions of the new CGM

HR for the Transmission Company (AEGCL), in terms of HRSC and the HR change process.

b) Enhancing the HR Functions

This functional action is required to establish the HRM organisation which, through consistent

feedback from the stakeholders of this consultancy, combined with the conclusions of the National

and International HR Experts based on their as-is analysis, is acutely deficient. It is deficient in terms

of national and international best HRM and training practices, but more importantly in terms of what

is required to effect and sustain the reforms of this consultancy. The absence of requisite HRM and

Training processes and policies has serious consequences: preclusion of support that a contemporary

and professional HR and Training function can provide to the organisation and its leadership (support

to management as well as to staff).

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As mentioned previously, the proposed roadmap for Training actions is covered in another section of

this report. However there is an integral relationship between the HR and training functions. For

example, there is a direct linkage between HR processes such as Human Resources Information

Systems, Manpower Planning and Performance Appraisal and Training.

As regards the expected impact of this action it can be said that enhancing the HR Function will

resolve the aforementioned gaps and related consequences.

Proposed Roadmap for Enhancing the HR Function:

• HR Structure and Staffing based on the requirements and experience of similar utilities.

• HRSC to obtain approval and sanction of structure and posts and implement the plans. This

includes:

• Obtain CGM Distribution –Professionally qualified through internal promotion or open recruitment

provided that he/she qualifies with the position specifications (Role definition and specifications

for CGM HR are at CGM Role at Annexe IX 2.1). As CGM has been proposed to be a member of

the HRSC, one of the foremost tasks of the Committee would be to recruit for this position.

• Internal most qualified 1 GM/CGM Transmission. For internal candidates, laid out selection

criteria and process to be met.

• Other Executives: Internal, as per the specified criteria and selection process. If no suitable

candidates internally found, then consider recruitment from outside.

• Consultants to spell out the selection process and required competencies for recruitment/internal

appointments.

• Hire University MBA HR graduate.

• Presentation of action plans and HR Orientation for HRSC. The Consultants participate as much

as possible and facilitate in conjunction with the Chairperson HRSC.

c) Development of an Enhanced Performance Appraisal System6

This functional action is required to lay the groundwork for a performance-based organisation, one of

the key guiding HRM principles of interim Report 1. Based on the as-is analysis, combined with what

was gleaned from stakeholder consultations, the National and International HR Experts concluded

that attention needs to be paid to better defining performance parameters and to bring the process

more in line with national and international best practices.

There are many and varied theories on effective performance appraisal systems. Systems often fail

due to their cumbersomeness, inappropriate organisational readiness and inadequate training and

orientation of the participants in the system. In the as-is analysis the Consultants found that with the

existing system follow-up is unclear and it is deemed that there could be improvement in defining

“what is being measured”. Additionally, it is felt that, rather than introducing a totally new system, it

would be more stability to build on the existing system. In face of the foregoing it is felt that the most

helpful approach for the three entities at this point is to: (a) focus on the levels of Class I and II,

clarify and simplify the existing system and dovetail in practical and relevant performance criteria

(both in terms of key performance indicators as well as requisite skills and traits)

Accordingly, the following steps are recommended to commence development and progress towards

enhancing the performance appraisal system:

Proposed Roadmap for Developing Enhanced Performance Appraisal System7:

• Develop summary of the existing process:

o Audit records for class I and II appraisals [see Annex IX 2.5.1 Performance Appraisal]

o Summarise existing process [see Annex IX 2.5.1¡Error! No se encuentra el origen de la

referencia.]

• Identify relevant performance criteria:

o Develop performance criteria for class I and II employees

6The development of the enhanced performance appraisal system should continue into the longer term

7 It has been recommended that the HRSC deal with Performance Appraisal up-front as a priority action item [see

Annex IX HRSC Action Plans]. This action would involve a more thorough researching of the required process.

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o Reference best practices and the work of previous consultancies of the Technical Assistance (TA) of ADB

o Obtain input from the three utilities.

• Develop Performance Appraisal System for Class I and II Employees:

o Reference best practices and the work of previous consultancies of the Technical Assistance (TA) of ADB

o Consult the three utilities

o Get Approval from the three utilities

o Include how affected Class I and II employees are to be communicated with, oriented and trained in the proposed system (system and skills required for it).

d) Process for approving and updating of Organisation Charts and monitoring

and reporting for Sanctioned Posts

For effective Human Resources Management (HRM), and to enable effective HRM analysis and change initiatives, it is imperative for all three utilities to have a clear process for approval of organisation charts, the preparation of sanctioned post lists and the monitoring and reporting of same on an on-going basis.

Proposed Roadmap for Organisation Charts and Sanctioned Posts:

• Each utility to have a well defined approval and monitoring process for organisation charts and sanctioning posts.

• The process to designate: who will initiate the process and be the approving authority for the same (BoD). Further, designate responsibility for distribution and communication of the charts and sanctioned posts.

• Designated functionary for each utility to be responsible for ensuring sanctioned post lists are monitored on an on-going basis

• Quarterly reporting to those who need to know regarding actual status vis-à-vis sanctioned/budgeted posts.

• To be dovetailed with Manpower planning system in the medium term.

e) Current Organisation Design

Pursuant to Action 4 above, and for the same reasons, the organization charts should reflect, as much as possible (i.e. approved), organisational recommendations of this consultancy

Once the process for Organisation Charts and Sanctioned Posts is in place (per above) each utility should prepare, on a priority basis, current organisation charts according to the following guidelines:

• At least senior manager (SM) level and up.

• Obtain input from this consultancy

• Ensure appropriate approvals are obtained.

• Ensure all affected managers are communicated to with respect to the final/approved version.

f) Manpower Norms (Action applicable to Distribution utility only)

In response to one of the key concerns identified at the January 2011 stakeholder interviews, it is recommended that the manpower requirements for Distribution be reviewed.

g) Creation of Legal Post

In response to one of the major concerns identified at the October 2010 and January 2011 stakeholder interviews, it is recommended that each utility immediately have a Legal post/ Section.

There is currently no legal functionary and there are several court cases pending at the field level.

It is vital to have professionally staffed Legal function placed with the Company Secretary.

Proposed Roadmap for Hiring Law Officer:

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• Gain agreement and approval for the posts

• Involve existing most senior HR manager in the selection process and have them

collaboration so doing.

• Reconcile new hires into process recommended above for Organisation Charts and Sanctioned

Posts.

4.1.2. MEDIUM TERM ACTIONS

a) Enhancing the HR Functions

Conduct Training for New HR Executive Trainees. Conduct training for first batch of HR Executive

Trainees, [see Annex IX 2.7 Training New HR Staff]

In 2014, after disaggregation takes place, consider upgrading CCMs posts to Director Personnel.

Development of an Enhanced Performance Appraisal System

b) Develop Performance Appraisal System for Class III Employees. Human

Resources Information System (HRIS)

Over time in enhancing the HR function, especially in avoiding bureaucracy and improving

effectiveness both in terms of HRM and cost, it will be necessary to support processes with a human

resource information system in each utility. This is positioned as a medium-term goal as the

processes and improved HR staffing have yet to be developed.

Proposed Roadmap for Developing a Human Resources Information System (HRIS):

• Develop a comprehensive list of information needs8

o Develop an HR /Training survey tool and process (i.e. to collect all data)

o Develop for each utility a list of all HR and Training information needs, both in terms of

records and data required as well as processing and report generation requirements.

o In developing this list work closely with: (a) IT staff, (b) to the extent possible with the IT

experts of this consultancy and (c) with HRSC and those involved in implementing processes

being worked on by it.

• Work in collaboration with IT staff to develop a HRIS that is compatible with other IT systems

c) Manpower Planning (MPP) System and Recruitment Plan

As indicated in the Inception Report, Manpower Planning (MPP) is a process wherein the organisation

forecasts its staffing resources needs in order to ensure that the necessary quantity and quality of

people are available at a given time to ensure the organisation is able to achieve its objectives. The

MPP process, which has yet to be developed, will also drive the recruiting function. Some specific

recommendations have been made in the action plan section of this report around some hiring

(e.g.HR staff and law officers). However a full-fledged recruitment plan, for other than known

immediate needs, is contingent on the outputs of the manpower processes covered in the roadmap

below. Additionally, recruitment plans, to be implemented effectively, will be contingent on the

enhancement of the HR function covered elsewhere in this report. Proposed Roadmap for Developing

a Manpower Planning System (MPP)9:

• Develop a comprehensive list of MPP information needs:

o Internal existing data as applicable (skills inventory, age/service profiles, organisation charts,

incumbency data, succession data etc.)

o External data as applicable (labour supply information from governmental and non-

governmental sources.

• Develop a MPP system10

:

8The identification of information needs should be ongoing, given that many HRM process developments will

continue into the long term.

9There is an inextricable link between the development of a MPP system and the development of an HRIS system

as described above.

10New information needs will continue into the long run as elements/processes of MPP are developed.

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o Utilise the information acquired in 4.1 above.

o Identify information required but not available and develop strategies/means to get it.

o To determine vacancy position against sanction positions for each function; whether various

functions have the requisite capacity and skill base, to meet the (a) present demands and (b)

future needs , expressed as number and level of posts (if standard manpower

modules/defined norms for manning are available then based on it ,or else based on best

judgment/experience and benchmarks).

o Develop linkages to and reconcile all elements of MPP (strategic HR planning, succession

planning, skills inventory, performance appraisal, career development, job descriptions,

labour supply information, internal/external recruitment resources etc.)

o Identify gaps; consolidate plans for annual approval of manpower.

o Plan for filling the gaps-internally/ outside recruitment.

d) Preparation of the companies for Retirement

While there are some workload norms for substation O & M similar norms for other areas will need to

be established.

e) Automated attendance records (medium term)

Towards statutory obligations of maintaining accurate time records, system of punch cards is today

one of the most basic practices in organisations. The same is proposed for all employees in the three

utilities. Not only does it deliver accurate information on hours worked, overtime, etc without delays,

it also saves time and effort and eliminates HR admin overhead and reduces workload. Automatic

collation of shifts, holidays and leave information of employees make attendance process hassle free.

At field level, it makes staff allocation, Shift mgmt and overtime mgmt systematic and easy.

Currently, a number of reputed vendors for software (which is hardware independent such as

magnetic, biometric, RFID, barcode, etc.) and hardware are available.

After consultations with key stakeholders and in principle approval of Management, HRSC to evaluate

/determine the relevant software and hardware system, costs etc., for implementing the same.

f) Motivating Employees: Performance linked incentives; incentivize postings at

remote sites; stagnation of career growth etc.

A multi pronged approach is recommended:

• For incentivizing of staff, located in remote locations to consider package of special facilities such

as: Departmental vehicle to be provided to dependents of employees for medical emergencies;

hostel allowance for children; good quality housing; additional recreation and welfare facilities.

• Well-conceived internal Communications Program to build pride of their company has also found

to motivate the employees. New ‘change’ lexicon and metaphors, as carried out by NDPL also is

found to be effective in this regard. Planned visits to well run utilities are often known to energize

and charge imagination of employees. Promotion Policy related aspects are addressed further in

this section under long term actions.

g) Development of an Enhanced Promotion System

Proposed Roadmap for Developing an Enhanced Promotion System:

• Draft Promotion Policy paper outlining how transition will be achieved from promotions that are

based almost entirely on seniority to a policy which motivates and rewards performance, ability

and experience. Some directional principles are:

o A policy that is based on a mix of merit (as determined by the Performance Appraisal

System); and

o Fulfilling minimum length of service in the grade (specified as eligibility criteria).

• Standard date of promotion-once a year.

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Up until certain grades (say manager level) promotions not to be strictly on vacancies (subject to

meeting the eligibility criteria laid out in the policy). In some of the utilities, there are often up

gradation of posts, creation of more posts with new areas/growth etc.)

o Strengthening of target linked PAS

o Assessing the likely impact on manpower profile

• Organise participatory forums of various stakeholders to get their inputs and ‘buy-in’

4.1.3. LONG TERM ACTIONS

a) Enhancing the HR Functions

Hire HR Executive Trainees Hire second batch HR Executive Trainees [see Annex IX 2.3 Hiring

Augmented HR and Training Staff]

• Conduct Training for New HR Executive Trainees. [See Annex IX 2.7 Training New HR Staff]

b) Development of an Enhanced Promotion System

Based on the activities carried out in the medium term, the promotion policy to be formalised,

subject to effective implementation of target linked performance based appraisals;

acceptance of ‘out of turn’ (read seniority based) promotions by stakeholders.


4.2.1. HRSC

The HRSC will only be successful if the following requirements are met:

• Earnest and on-going support, from the top down, of the HRSC terms of reference

• Related to above, timely provision of the resource requirements to operationalise the HRSC

process, including: i) enabling of time required for all members to fulfil their roles in serving on

the committee and implementing action plans; ii) timely access to required information and data;

iii) office materials and secretarial support and iv) facility space.

4.2.2. ENHANCEMENT OF HR/TRAINING FUNCTIONS, DEVELOPMENT OF HR PROCESSES

AND SPECIFIC STAFFING RECOMMENDATIONS

For all of these action recommendations to be successfully acted upon the following will need to be

provided by the three utilities:

• Timely provision of people, resources, facilities and funding as applicable

• Timely approvals as required

• Timely access to, and provision of, required information and data

• General support to agreed-upon actions.


Initially the responsibility for the HRSC will be the approval by the three CMDs and the Director PMU

of the HRSC terms of reference. From this point on implementation will flow from these terms of

reference, including especially responsibilities designated in the quarterly action plans.

With respect to implementation responsibilities involving enhancement of HR/Training functions,

development of HR processes and specific staffing recommendations, they will (as applicable) rest

with:

• The responsibility protocols within the utilities

<Or>

• Responsibilities assigned within developmental action plans

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Assam: Capacity Development of the Assam Power Sector Utilities – Final Report – Transmission V-111


With respect for HRSC the prime indicator for this action will be the official approval by the

Chairman/MDs and the Director PMU of the terms of reference. From this point on performance

indicators and criteria will flow from the quarterly action plans.

With respect to enhancement of HR/Training functions and development of HR processes, the

indicator of success will be the timely achievement of the actions outlined elsewhere in the roadmaps

for each action. As indicated previously, quantifiable measurement criteria will not be available until

the HR processes (such as manpower planning) are in place.

With respect to specific staffing recommendations, the criteria for success will be approval of HR

structure and staffing and implementation of staffing of key positions

• New Law Officers have been hired into each of the three utilities (4 months from approval of

Interim Report 2)

V INFORMATION TECHNOLOGY


STANDARDS


The objective of this assessment is to establish a baseline understanding of ASEB current IT

capabilities in relation to IT management best practices and industry leaders.

The identified gaps and issues found in ASEB current state IT capabilities help clarify the areas in

which ASEB could best focus resources to further optimize IT infrastructure and services.

This assessment provides a view into ASEB’s current IT capabilities across the business functions. Key

Objective of As-Is Analysis is as follows:

1. Determining the perceived value and efficacy of the current portfolio of IT Infrastructure &

Services

2. Identifying the unmet information technology needs and barriers to effective use of IT

3. Learning how participants are currently using IT to support commercial, administrative and

technical processes of Generation, Transmission and Distribution utility

4. To identify any additional requirements of the utility for maximum utilization of IT infrastructure

wherever feasible for smooth operations and monitoring of processes in all three units with an

integrated approach on all fronts.

5. Discussion with ASEB on issues so as to arrive at the final IT Road Map for all the three units.

Approach adopted for the As-Is Study:

To perform this study, consulting team closely interacted with key ASEB personnel to gain a good

understanding of ASEB’s major business problems and concerns, objectives of this project, corporate

philosophy and basic operating and maintenance practices. These meetings also allowed Consulting

Team to obtain a basic understanding of the design and configuration of IT infrastructure at different

utilities of ASEB.

During the meeting, Consulting Team gathered data needed to perform the analysis of ASEB current

practices and projected plans to determine the impact of the proposed initiatives on the current

practices. This data included normally collected information about IT philosophy, existing practices,

Trained Man Power, Organizational and Integration Issues, Implemented Systems already in

operation etc.

The approach adopted for this study involved gathering primary and secondary data pertaining to IT

assets currently in place at the various offices across five units of ASSAM State Electricity Board. In

addition, our approach also included assessment of the existing IT infrastructure and applications at

ASEB.

Performing an assessment of the current state by executing the following activities has done an in-

depth study:

• High level review of current and future business strategy with Utility’s Senior Management

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• Understanding of current IT infrastructure

o System and Business Applications, Database architecture and Technology architecture

o IT organization, IT procurement & present IT Budget

• Understanding the existing hardware and software, and classifying it on the basis of scalability

and compatibility with future system by analysing the features of the following components:

o Networking Hardware: LAN, Switches, Routers and Cabling System.

o Servers & Workstations Hardware: Desktop PCs, Database Servers, GIS Servers, Backup

Servers, UPSs and Printers.

o Software Applications: Anti-Virus Software and Power CBS

(Metering/Billing/Collection/Pre Billing) and Energy Audit Applications.

• Identify stakeholder expectations of the future systems.

The details of such primary and secondary methods used for data collection are given under:

• Review of available Literature: Customer forms, Ledger sheets, DPR and other documents.

The collection of literature in the form of MIS Reports, Strategy Documents, bills, service forms

(New Connection/Disconnection), Customer Ledgers, etc. gathered from ASEB were carefully

studied to identify key elements inside these forms for inclusion in the As-Is Study report.

• Stakeholder discussions:

Through structured interviews with the stakeholders critical questions related to the As-Is study

of the utility were addressed. Maximum use was made of the extensive knowledge the

stakeholders have due to their long standing relationship with the utility. These discussions

were further supplemented with telephone conversations when and where required and

appropriate. The information obtained provided a valuable input to this study.

The structured meetings which followed maximized the quality and quantity of the information

gathered.

• Site Visits:

The As-Is study team visited utilities offices including its Head Office, circle office, and

collection Centre. These visits provided an opportunity to collect data at the facility and

component level of the utility. In addition to this it also provided a means for the study team to

interact with the utility personnel at various levels for better understanding of the processes

carried out by middle and lower management plus catalogue daily field activities carried out by

the field staff.

• Reviews by our internal team of experts in the Power and IT sector.

Our internal team of experts has a wide range experience in both the power and IT sector

which has helped in providing useful insights to the report and has ensured that the report has

a holistic coverage.


In this section, the main intention is to elaborate the main drivers/indicators/standards that each

utility should follow or be integral of the system for optimal performance or sustenance. This should

also elaborate on how consultant will measure and assess various performance parameters.

IT Governance specifies accountabilities for IT-related business outcomes and helps companies align

the IT investments with the business priorities. But IT governance is a mystery to key decision

makers in companies. The top performing companies carefully design governance and managers

throughout the enterprise make daily decisions putting design into practice.

IT governance is the decision rights and accountability framework for encouraging desirable

behaviours in the use of IT.

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Figure 8 - Mapping of ASEB's IT governance

Benchmarking of IT metrics and monitoring of KPIs is a standard and structured approach used to

evaluate the outcome of IT activities, practices and process. The results provide insight into the

actions taken by management that both positively or negatively affect the performance of the

organization.

Figure 9 - Business value obtained from IT

Proposed Benchmarking Parameters, common for Generation, Transmission and Distribution Utilities

related to IT Infrastructure are as follows:

1.2.1. NETWORK DOWN TIME

It refers to periods when a network system (LAN / WAN / Internet) is unavailable to the utility staff or

consumers for availing any service.

An operational network is a strategic business resource. It carries everyday messages and mission-

critical data, and makes communications possible between people and business processes. To many

people in the company it is probably invisible, an assumed utility like water or electricity. And like

those utilities, it becomes most visible when it’s not there.

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What happens when the network is not available? A network outage can have a significant impact on

a corporation’s image and its customers. Employees can’t get access to email, phones or critical

business applications. Business processes aren’t updated. And customers may look elsewhere for the

information they seek, or to place an order. On average, 3.6 percent of annual revenue is lost to

downtime in large businesses, according to a recent study. The negative consequences of a network

outage are more than financial. Decline in corporate image was the biggest concern of the

respondents in a survey, with loss of customers close behind.

Figure 10 - Sources of Network Device Downtime

It is interesting to note that companies with a more proactive or strategic approach spend a smaller

percentage of their budget just keeping things running (60 to 65 percent), compared to those with a

reactive or chaotic approach (75 to 80 percent). The lower rate may indicate a virtuous cycle of

benefit, as the companies working proactively continue to innovate and improve their IT operations

and outperform their reactive competitors.

Operations teams face many challenges to increasing network availability. Network equipment

downtime can come from planned maintenance activities, unplanned hardware or software failures, or

human error.

1.2.2. APPLICATIONS DOWN TIME (IN HOURS): UNPLANNED APPLICATION DOWNTIME

CAUSES HAVOC AND GREAT EXPENSE

Enterprises should not let infrastructure redundancy provide a false sense of availability assurance. To

address the 80 percent of unplanned downtime caused by people and process failures (vs. technology

failures or disasters), enterprises should invest in improving IT processes, such as change,

configuration and problem management; performance and capacity planning; application architecture

and design; and operator hiring and training. Investments should also be made in automation. Other

downtime causes should be addressed by eliminating single points of failure through redundancy,

with vendor service contracts and component monitoring

To reduce downtime caused by application failures, enterprises should invest in improving and re-

engineering IT processes, including the following:

• Change management — reduces unplanned downtime caused by inadequate planning and testing

of application changes, enables a more proactive approach toward problem prevention (see Note

3);

• Problem management — improves problem identification, isolation and resolution, thereby

reducing time to repair;

• Configuration management — tracks the relationships between dependent application and

infrastructure components, enables better understanding of change impact and quicker fault

diagnosis;

• Application architecture and design — reduces single points of failure, aides in problem isolation

and makes application failures more transparent to users; and

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• Performance management and capacity planning — proactively identifies current and future

resource shortages impact SLAs.

1.2.3. RECOVERY TIME OBJECTIVE - RTO

The Recovery Time Objective (RTO) is the duration of time and a service level within which a business

process must be restored after a disaster (or disruption) in order to avoid unacceptable consequences

associated with a break in business continuity.

It includes the time for trying to fix the problem without a recovery, the recovery itself, tests and the

communication to the users. Decision time for user’s representative is not included.

The RTO is measured in seconds, minutes, hours, or days, and is an important consideration in

disaster recovery planning. Different business functions may have different recovery time objectives.

For example, the recovery time objective for the payroll function may be two weeks, whereas the

recovery time objective for sales orders processing may be two days. Numerous studies have been

conducted in an attempt to determine the cost of downtime for various applications in enterprise

operations. These studies indicate that the cost depends on long-term and intangible effects as well

as on immediate, short-term, or tangible factors. Once the RTO for an application has been defined,

administrators can decide which disaster recovery technologies are best suited to the situation

For example, if the RTO for a given application is one hour, redundant data backup on external hard

drives may be the best solution. If the RTO is five days, then tape, recordable compact disk (CD-R),

or offsite storage on a remote Web server may be more practical.

RTOs are usually tiered by criticality. You’ll need to look at your company’s unique requirements as to

how many tiers are appropriate for your organization—more than five generally becomes

unmanageable. Examples of five RTO tiers might be:

Table 17 - Examples of RTO tiers

Tier

No. Description

Tier 1 Fault tolerant with virtually no impact to the end user if the system goes down.

Replication is part of the design of the system/application and usually requires Tier A RPO

Tier 2 RTO of less than 24 hours. Requires hot standby equipment and usually a Tier B RPO.

Tier 3 RTO of less than 48 hours. Test and development equipment takes on a production role in

the event of a disaster. This usually only applies when a company has a second data

centre with production running at one site, and test and development running at the other

Tier 4 RTO of two to seven days. Includes lower priority applications than tiers2 and 3.

Supporting hardware can be either remaining capacity at a second data centre or

hardware available via drop ship arrangements with a third-party vendor

Tier 5 RTO of more than seven days. Requires acquisition of hardware and restoration of systems

Organizations determine RPOs based on the amount of data or transactions that they can afford to

lose. Possible RPO tiers include:

Table 18 - Possible RTO tiers

Tier

No. Description

Tier A No data loss

Tier B RPO of less than 24 hours

Tier C RPO of last backup (24–36 hours in most cases)

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1.2.4. RECOVERY POINT OBJECTIVE – RPO

The recovery point objective (RPO) is the maximum acceptable level of data loss following an

unplanned “event”, like a disaster (natural or man-made), act of crime or terrorism, or any other

business or technical disruption that could cause such data loss. The RPO represents the point in

time, prior to such an event or incident, to which lost data can be recovered (given the most recent

backup copy of the data).

• RPO and RTO targets are a key step towards defining the organization’s risk appetite and

requirements for a business continuity plan.

• RPO and RTO allow IT to convince senior management of the need for recovery spending by

using quantifiable targets set by the business as a basis for such spend.

• RPO and RTO help you in selecting the appropriate recovery technologies. They define the range

of what is possible in terms of recovery technologies and processes.

• In doing this, RPO and RTO help achieve the right balance between meeting business objectives,

yet not overspending on technology to meet goals that were never actually set.

• RPO and RTO figures facilitate the testing and audit of a business contingency and disaster

recovery plan by providing a benchmark for measuring results, and by constituting the basis for

a data recovery service level agreement (SLA).

As such RPO and RTO are key metrics for measuring recovery time and data characteristics. Other

supplementary metrics include:

• Recovery Time Granularity (RTG) determines the time spacing between recovery points; whereas

RPO is the last recovery point prior to a failure, RTG defines recovery point selection options prior

to that recovery point.

• Recovery Object Granularity (ROG) expresses the level of objects that a recovery solution is

capable of recovering. For instance, object granularity may be a storage volume, a file system, a

database table, a database row / column / field, a transaction, a mailbox, an email message, etc.

• Recovery Event Granularity (REG) measures the ability of a recovery solution to track events and

to recover an application or data to a specific event.

• Recovery Consistency Characteristics (RCC) measures the usability of recovered data by the

associated application.

• Recovery Location Scope (RLS) defines where the protected data must be stored when recovery

takes place (i.e., locally, remotely, on which media / storage tier).

• Recovery Service Scalability (RSS) measures the number of applications or data sets the

recovery solution handles, and the maximum size of the data it can store.

• The Maintenance Point Objective (MPO) describes the maximum allowable window for the

performing scheduled system maintenance

Deploying RPO and RTO targets, including supporting metrics, can be done in any of the following

circumstances:

• An immature of non-existent business recovery strategy and architecture is in place

• Basic backup and recovery processes and technologies are in place, but these have been

deployed over time without regard to formal business requirements (i.e., these were “IT-driven”)

• A formal process and capability for BCP is in place, and RPO / RTO definition is one of the final

stages of process maturity.

In the first situation as in ASEB, RPO and RTO target deployment goes part and parcel with

deploying a full BCP capability. Depending upon the size and complexity of the organization, that

deployment can take from a number of months to over a year.

1.2.5. IT STANDARDS

ASEB Utilities shall adopt various ISO Standards for maximum utilization of IT Infrastructure and

skilled resources and providing the secure working environment. Some of the basic standards are as

follows

a) ISO 9001:2005

ISO 9001:2000 specifies requirements for a quality management system where an organization

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• needs to demonstrate its ability to consistently provide product that meets customer and

applicable regulatory requirements, and

• Aims to enhance customer satisfaction through the effective application of the system, including

processes for continual improvement of the system and the assurance of conformity to customer

and applicable regulatory requirements.

All requirements of this International Standard are generic and are intended to be applicable to all

organizations, regardless of type, size and product provided

b) ISO 27001: 2005 (Information Security Management System)

Most organizations have a number of information security controls. Without an ISMS however, the

controls tend to be somewhat disorganized and disjointed, having been implemented often as point

solutions to specific situations or simply as a matter of convention. Maturity models typically refer to

this stage as "ad hoc". The security controls in operation typically address certain aspects of IT or

data security, specifically, leaving non-IT information assets (such as paperwork and proprietary

knowledge) less well protected on the whole. Business continuity planning and physical security, for

examples, may be managed quite independently of IT or information security while Human Resources

practices may make little reference to the need to define and assign information security roles and

responsibilities throughout the organization.

ISO 27001 2005 is the de-facto international standard on establishing, maintaining and improving an

Information Security Management System (ISMS) for both public and private sector organisations.

Standard is designed to:

• Identify an organisation’s information assets

• Identify the threats to those assets

• Identify the vulnerabilities that might be exploited by those threats

• Identify the impact on an organisation if the loss of confidentiality, integrity or availability (CIA)

of any asset was to occur

Why compliance is important for business or service benefit?

• By having a formal documented ISMS which has been independently assessed, an Organization

can demonstrate to its customers and clients that they are committed to security, and have the

ability to handle information in a secure manner.

• This in turn may negate the need for their customers to spend time and allocate resources in

carrying out their own independent audits. Equally customer confidence can improve, thereby

increasing trust in your brand or image.

• There may also be contractual or service level requirements that an organization works in

accordance with ISO 27001.

• In respect to public sector bodies, there is a requirement for government bodies to have their

critical systems compliant and for other public organizations; the government are persuading

them to become compliant.

• The ability to respond quickly to any information security breaches or incidents is one of the key

clauses in ISO27001. The ability to minimize the opportunity to incidents to occur is a major

advantage for business/service resilience. It also links closely with IT Disaster and Business

Continuity work.

1.2.6. POWER USAGE EFFECTIVENESS (PUE)

Energy efficiency is rapidly becoming a key data centre issue. The more energy efficient the data

centre, the lower the on-going operating costs for facilities’ users. Power usage effectiveness (PUE) is

a metric used to determine the energy efficiency of a Data Centre. PUE is determined by dividing the

amount of power entering a data centre by the power used to run the computer infrastructure within

it. PUE is therefore expressed as a ratio, with overall efficiency improving as the quotient decreases

toward 1. Members of the Green Grid, an industry group focused on data centre energy efficiency,

created PUE.

Data centre infrastructure efficiency (DCIE) is the reciprocal of PUE and is expressed as a percentage

that improves as it approaches 100%

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Figure 11 - Power usage effectiveness

The PUE can range from 1 to infinity. In the case of the PUE, data centre energy efficiency increases

the closer the number comes to one which indicates that a greater portion of the power required by

the facility is used to drive the IT equipment.

For example, a PUE score of 3 indicates that the data centre demand is three times greater than the

energy necessary to power the IT equipment.

1.2.7. EMPLOYEES / DESKTOPS RATIO

This ratio shall be monitored for each of the five utilities of ASEB. Ratio shows the awareness and

penetration of IT systems in the organization. As the ratio improves it shows that more operations are

being done in computers and more and more employees are working on the systems.

1.3. AS-IS ANALYSIS

1.3.1. INVENTORY

• ASEB Utilities does not have any storage and backup system. Distribution utility is taking backup

on a client PC and Compact Drives.

• AEGCL does not have any effective and up to date security mechanism for its current IT

Infrastructure.

• Desktop Machines are there limited offices of all the five utilities. General Configuration of the

desktop machines are as follows

o Desktop Make : HP, DELL, HCL, Compaq, LG

o Operating System : MS Windows XP professional

o Processor : Intel Pentium IV or AMD Athelon, 2.80 GHz

o RAM : 256 MB DDR, 512 MB, 2 GB, 4 GB

o Monitor : 15” Colour Monitor

• Printers are there in limited offices of all the five utilities. Configuration of the Printers are as

follows:

Table 19 - Printers configuration

Printer name Model Number

HP (Printer Copier,

Scanner)

HP C4288 All In One Printer

HP (DeskJet) HP 5438

TVS MSP 330

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Lipi T6050

Dot Matrix Printers MSt-240 Classic

1.4. APPLICATIONS

• Geographical Information System (GIS): There is no consumer indexing done and no GIS system

in place for Asset Mapping and Connection tracking.

• Mail / Messaging System: AEGCL’s utilities do not have any Mail / Messaging System in place and

they are currently dependent on public email systems like gmail.com or yahoo.com etc.

• EMS / NMS: ASEB’s utilities do not have any Enterprise Management System or Network

Management System in place.

• Asset and Maintenance Management: AEGCL does not have any application for the Asset and

Maintenance Management in any of the Utilities

• Management Information System: Normally MIS are being generated manually using MS Excel or

basic level reports are extracted from CBS and Energy Audit System. There is no utility level or

enterprise level MIS system for Management and different level of offices for monitoring the work

progress.

• Website: www.aegcl.co.in (Power Transmission)

• Currently there is no IT system to monitor and control financial and HR transaction in any of the

utilities of AEGCL

• There is no ERP, SCADA, GIS, Plant maintenance or messaging system in Transmission

organization.

• SCADA system is implemented in Transmission organization but is not being used in fullest

capacity.

1.5. NETWORK CONNECTIVITY

• ASEB has one Network Switch per Office Currently. The entire setup in the office is connected in

a LAN through a switch. Configuration of the Switch is as follows:

o HCL 2420GT Win Smart Gigabit Ethernet Switch with 24 Nos. 10/100/1000 Mbps ports

o Dlink make with 24 Nos. 10/100/1000 Mbps ports

• ASEB Utilities does not have any Router Installed in any Office.

• For communication purpose, ASEB Offices are not equipped with any IP Phones or IP PBX

equipment’s.

• ASEB currently does not have any VPN/MPLS network. There LAN is also isolated with no external

connectivity

• LAN Connectivity is provided using the CAT 5 Cabling within the offices of Utilities

1.6. DATA CENTRE INFRASTRUCTURE

Currently there is no Data Centre or Disaster Recovery Centre Infrastructure available in any of the

utilities of ASEB.

1.7. BENCHMARKING PROCESS AND STANDARDS (REVIEW OF NATIONAL AND

INTERNATIONAL BEST PRACTICES). CASE STUDY: ANDHRA PRADESH (AP)

TRANSCO IMPLEMENTS ERP

AP Transco was established in 1999 following the unbundling of the Andhra Pradesh State Electricity

Board. The company was initially responsible for the transmission and distribution operations of the

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erstwhile board. In April 2000, its distribution business was transferred to four distribution

companies.

AP Transco is currently responsible for strengthening, expanding and controlling the state’s

transmission infrastructure at voltage levels of 132 kV and above. It also handles load-dispatching

operations. As of end March 2009, AP Transco owned and operated 371 substations and 30,499 ckt

KM of transmission lines.

IT applications were implemented in AP Transco during the early 1990s by the company’s IT division.

Some of the key areas where these applications were introduced were high tension/low tension

billing, expenditure monitoring system, payroll package ad GPF accounting. The department also

developed the circle performance management and reporting system software that worked on the

lines of modern management information software system. At present company uses a mix of

software such as proc, Visual Basic, Java on the front end and Oracle, Linux Operating System and

Sun Solaris on the back end.

1.7.1. ERP IMPLEMENTATION

AP Transco implemented the ERP system in August’ 2007, which helped to integrate its legacy

systems with the newly introduced ones. The implementation of the Resource Optimisation Solution

for Enterprise (ROSE), an ERP Solution, was initiated in 2006 and with the help of Industrial Finance

Solutions (IFS) Private Limited. It was first deployed on a pilot basis in two zones and later extended

to three other zones. Along with the implementation of the ROSE, training was extended to the core

and end-user team and the IT team.

The project include the setting up of data centre, comprising centralised database servers and

application servers with a storage area network infrastructure, at company’s headquarters. The

existing mail and Internet servers were also integrated with the ERP application.

The ERP Solution used the existing optical fibre communication network spread across the state.

Places not covered by the network were connected through the leased lines provided by BSNL as well

as other communication tools such as very small aperture terminals, microwave communication and

power line carrier communication.

AP Transco has implemented four modules of ERP so far. These are Project Management, Material

Management, Maintenance Management and Finance Management. AP Transco undertakes material

procurement and finalisation of work contracts through the e-procurement platform. Once the

material is procured, its movement is captures by the material management module of ERP. The

Finance Management module helps in budget formulation, allocating cash grants to various

accounting units, processing payment to suppliers, capitalisation of assets and depreciation

calculation.

The company is in the process of implementing the fifth ERP module - the human resource

management system (HRMS). It would help track employee details, such as payroll and attendance

record. It would also assist the company in training management, employee development ad

recruitment.

1.7.2. USE OF IT IN PLANNING

The planning wing of AP Transco uses the trend method, the end-use method and the economic

method (econometric-views) for long term load forecasts. The data for these applications is collected

from various departments and Discos and through customer surveys. These forecasts are then fed

into other software such as system planning and production costing (SYPCO) and power system

analysis framework (PSAF). SYPCO helps in generation planning while PSAF helps in transmission

planning.

For short term planning, the power system division undertakes system studies using the DISBUT and

CYMEFLOW packages. DISBUT is a GUI application developed in-house for distribution system

planning. Different parameters are fed into DISBUT and are stimulated for load flow studies. The

CYMEFLOW software is used to analyse the power flow in three phase electric networks.

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Sr.

No.

Best Practices

of IT Usage Key Description

Benefit from the

Practice

Utilities

Adopted in

India

1 IT in Drawing

Approval and

Documentation

disbursal

Information technology and

computerisation are used in

drawing and document

approvals and their disbursal

to the executing agency.

The drawings and

documents are archived in

the computer format to

reduce the space for

documentation storage.

Power grid has also started

on-line submission and

approval of design

documents and drawings for

one of its projects. This

substantially reduces the

time required for finalisation

of engineering. Because of

benefits achievable, this

practice may be extended

further

Standardization of Tower

Design, eliminates

repeated type testing of

towers, Permits usage of

tower of one line for other

line, reduces spare

requirement.

The standardization of

tower design makes the

data readily available for

foundation design.

The procurement of steel

by the manufacturer/

fabricator of the tower can

be done immediately

without waiting for design

finalisation and successful

type testing

POWERGRID

2 ERP Enterprise Resource

Planning based on SAP has

been implemented at all

location and its subsidiaries

covering all core business

processes of Finance,

Materials, Maintenance,

Projects, Operations, HR,

Fuel management etc.

Approval of all the

schemes and projects at

the HQ.

Consolidation of all

material indents from

projects, and operation

and maintenance side at

HQ and generation of

item-wise purchase

requisitions

NTPC

2. GAPS IDENTIFICATION AND ANALYSIS

2.1. GENERAL OVERVIEW OF IT GAPS

Manual and cumbersome processes, inadequate controls, insufficient commercial focus, limited

transparency and lack of reliable information characterize the operations in the power utilities of

ASSAM. As a result, the operations are highly inefficient with substantial revenue leakages and poor

customer orientation. The use of IT has been low and in pockets. The several standalone applications

have limited ability to effectively interface and integrate either with other applications or with

potential applications to be deployed in the future.

An observation across the organisations is that the approach towards IT has been piecemeal with

standalone applications deployed for a limited operational requirement. IT has been used only as a

tool to address a specific issue or two at a time without a long term or holistic strategy. This approach

has resulted in issues such as:

• Standalone systems – Coverage to limited geographical areas

• Systems in place are largely aggregators or processing tools

• Basic transactions are still manual without inbuilt controls

• Limited integration of systems

• Duplication and/or under-utilisation of resources

• Absence of a standard architecture or database

• High cost of maintenance

MERCADOS EMI - NDPL


• Inadequate interface and integration with other applications

These issues have adversely affected the returns from IT investments. Incoherent technology

strategy leads to situations where incompatible options are selected and large sums of money are

wasted in attempts to integrate them. The bottom line is that the business performance has not

improved.

While Indian IT sector has helped numerous organisations around the globe to derive substantial

benefits from application of IT, there is plenty of room for IT application within the power sector in

India. There is a need to look at the global practices in IT adoption in the power sector so that ASEB

can benefit from them

A summary of the Gaps Observed in the IT Usage across the organisation is as follows:

• Local Area Network (LAN) or Wide Area Network (WAN) Communication Infrastructure is not

available in Utility Offices, which are required as basic IT Infrastructure for deploying any

Commercial or Operational IT Systems.

• IT Infrastructure like Data Centre and Disaster Recovery Centre does not exist for hosting any

application of the Utility. All standalone applications are being hosted in the individual offices on

low-end servers / high end PCs without any backup or storage devices.

• Power Utilities of ASSAM does not have any effective and up to date security mechanism for its

current IT Infrastructure.

• Desktop PCs and Printers are not available in all offices that are leading to more manual work

and lot of redundancy in the day-to-day working.

• All the functions like HR, Administration, Procurement, Inventory are being managed in

decentralised manner and totally manual. Best practise of these functions shall not be adopted

by the organisation until these are automated with better monitoring and system defined process

accountability.

The implementation of IT strategy aims to alter all this as every function will be IT supported and

every employee will have access to a PC in his work place. The employees will execute most of their

desk jobs on computer. The successor entities shall have to undertake extensive IT training

programme to make employees feel equipped, skilled and comfortable in a computerised operational

environment.

2.2. SPECIFIC GAPS OF AEGCL

• Lack of feasibility study: Technical and Financial.

• Concept of Stipulated Timelines and Service Level agreements between the various offices /

divisions are not evident.

• The systematic usage of centralised information / MIS to track progress of schemes is missing.


PLAN

3.1. SHORT TERM ACTIONS (QUICK WINS)

3.1.1. BASIC LEVEL IT INFRASTRUCTURE IN ALL OFFICES

Utilities shall deploy basic IT infrastructure in its Head office, and all other offices. Basic IT

Infrastructure includes Desktop PCs, Printers, LAN, WAN, Internet, Mail Messaging Services, Anti-

virus solution and Office Management Suite with proper training to the employees to use IT in their

day to day operations.

3.1.2. MANAGEMENT INFORMATION SYSTEM ON SOFTWARE AS A SERVICE (SAAS)

BASIS

MIS are needed to manage organisations effectively and subset of internal controls procedures

covering the application of people, documents, technologies, and procedures to solve business issues.

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3.1.3. IMPLEMENTATION OF ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM (PHASE

– 1) FOR FINANCE, PROJECT MANAGEMENT, MATERIAL MANAGEMENT, MAINTENANCE

MANAGEMENT

ERP implementation is required for integrating all base level support functions with a single integrated

application. ERP will capture the data from source and a standard ERP like Oracle or SAP will help the

organisation in long run for integrating with primary processes.

3.1.4. TOWER DESIGN TESTING SOFTWARE

It is required for better performance and maintenance from the towers

3.1.5. E-TENDERING SOFTWARE

E-Tendering is a secure on-line electronic tendering and procurement management system that

permits teams to compile on-line tender documentation, pre-qualify, invite and receive closed bids

with messaging, audit trails and worldwide 24x7 access using new web 2.0 technologies.

On-line tenders are published as digitally sealed bids into an on-line safe deposit box. Specified

representatives can only access them on the pre-determined e tender closing date. The user-friendly

system is logical and intuitive and ensures even suppliers with no knowledge of any on-line tendering

system can respond easily.

Electronic tendering systems reduce tender periods to days rather than weeks, providing significant

improvements to current non-automated working practices. It is revolutionising procurement and is

likely to pave the way towards a change in contractual legislation, reducing errors, waste, time, risk

and costs.

3.1.6. FACILITY MANAGEMENT SYSTEM

All power utilities of Assam does not have adequate in house skills to maintain and undertake the

administration of the applications, OD, Database, hardware and network elements of the IT

Infrastructure. . It will be best served to outsource the maintenance and administration of complete

IT Infrastructure. This is in line with the current trend in the Government and Public sector

organisations. IT infrastructure should be managed not just from a technology perspective, but from

a business perspective as well.

3.2. MEDIUM TERM ACTIONS

3.2.1. KNOWLEDGE MANAGEMENT SYSTEM

To provide comprehensive content management and enterprise search, accelerating shared business

processes, and facilitating information sharing across boundaries for better business insight.

3.2.2. LOAD FORECASTING SYSTEM

Electrical Load Forecasting software is an ideal tool for industrial users as well as utilities to reliably

and accurately forecast future short term electrical loading in the system. A good electrical load

forecast has a direct and significant impact on costly generating unit start-ups and shutdowns, energy

purchases, managing system demand as well as scheduling system upgrades based on predicted load

growth.

3.2.3. IMPLEMENTATION OF ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM (PHASE

– 2) FOR HR, PERFORMANCE MANAGEMENT SYSTEM

ERP implementation for workforce is required for integrating with all base level support functions with

a single integrated application. ERP will capture the data from source and a standard ERP like Oracle

or SAP will help the organisation in long run for integrating with primary processes.

3.2.4. SCADA SYSTEM

As a minimum, the SCADA functionality includes continuous monitoring of the status and performance

of all power system apparatus located in the grid substations from a central location (the Control

MERCADOS EMI - NDPL


Centre). SCADA functionality also includes support for remote control of substation devices, including

transmission switchgear, load tap changer (LTC) transformers, substation capacitor banks, and feeder

circuit breakers.

3.3. LONG TERM ACTIONS

3.3.1. GEO-GRAPHICAL INFORMATION SYSTEM

Geographic Information System solution consists of a system for capturing, storing, checking,

Integrating, manipulating, analysing and displaying geo data related to positions on the Earth's

surface and data related to attributes of the entities/Customers in an utility area. It pertains to both

vector and raster GIS. The use of capabilities includes hardware, software and data, provided by a

Geographic Information System specific to a set of user requirements.

3.3.2. DISASTER RECOVERY MANAGEMENT SYSTEM FOR CRITICAL APPLICATIONS

Every business faces minor downtimes, and major unknowns; hence it is important to have plans in

place which guarantee business contingency. Most Organisations consider BCP as an inefficient use of

resources, i.e. an expenditure that does not bring any return on investments. But statistics tell a

different story, and events like Critical Business information unavailability serve as drastic reminders

that it is vital for every company to have plans in place to ensure business continuity. Business

Continuity Plans cost relatively little in comparison what the company could potentially lose in a major

incident.

3.3.3. ENTERPRISE APPLICATION INTEGRATION (INTEGRATION OF THE ERP SYSTEM

WITH GIS AND SCADA SYSTEMS)

To have control over all solutions and to successfully implement the enterprise level MIS, it is

required that all the different functions like support functions, core functions and applications for

other stake holders are integrated and data flow take place from one department to other without any

manual intervention. For achieving this framework, it is required that after stabilising the different

functions with their applications, all the applications needs to be integrated as a final stage for the IT

Road Map.


This section will include the resource requirement and other key imperatives that are required to be

in place for supporting the implementation process in a time bound manner.

• Formation of an Dedicated IT Task Force

• Formation of an Steering Committee

• Formation of an Field Support Team for each Town

• Electronic Meters Installation / Replacement

• LAN connectivity in all the offices and network connectivity between all the offices for data

transmission

• Selection of best suitable business models for IT implementation

• Structured Planning.

Last two are to be developed in detail in the next sections.

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3.4.1. SELECTION OF BEST SUITABLE BUSINESS MODELS FOR IT IMPLEMENTATION

3.4.2. STRUCTURED PLANNING

A structured and comprehensive IT strategy and plan will help Assam Electricity Grid Corporation

to derive the benefits from information technology. The IT strategy and plans will need to consider

several aspects including:

• The overall business strategy and needs

• Potential changes to operations

• Potential changes to industry structures (e.g. disaggregation of distribution business into

business development area focusing on information technology)

• Leveraging existing IT infrastructure and applications

The phasing of the investments will need to be driven by the business priorities and the return on

investments.

The IT strategy and plan will include details on:

• Application architecture

• Data architecture

• Infrastructure requirements – hardware and network

• IT organisation, processes, policies and standards

• List of business–IT initiatives or projects and implementation plan for the applications to be used

by the organisation over a period of time

• Investment requirements and their phasing

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The above will form the blueprint for IT investment.

As a next step, functional specifications for all key applications need to be developed taking into

account current practices and potential business changes. Again as case of IT strategy and plans, the

functional specifications could be developed for all the business with each utility making specific

changes for meeting this unique requirement.


Utility shall prepare a Steering committee to monitor the complete implementation program from

designing to the Go-Live Stage. Steering committee shall consist of Top Management member of

Utilities, Members from different functions like HR, Civil, Automation, Operations, Commercial,

Metering, Procurement, Planning, IT and Stores. Steering committee would be responsible for

arranging the funds for the project, manpower mobilization, regular monitoring for any financial

impact or technical change, contract management with the implementation partner, etc.

Proposed IT Task Force would be responsible for co-ordinating with the Implementation Partner(s)

for assisting and facilitating the vendors in implementing the solutions as per the designed

specifications and within timelines. IT Task force would be responsible for final SRS Designing,

Process Blue Printing, Finalising the Bill of Materials, Testing and post implementation Support.

Proposed Field Support Team would be responsible for following activities:

• Monitoring the commissioning activity of AMR Meters and Modems,

• Facilitating the vendor for proper Asset Mapping,

• Testing of data and process work flow


Sr. No

Area KPI

Unit of

Measurement (UOM)

Measures Representative

Standards

1 IT Usage Network

Uptime

% (Total Hours for which Network was

up + Total Hours of Scheduled Downtime) / Total Hours of Working

Hours in the Organisation

100%

2 IT Usage Recovery

Time Objective

(RTP)

Hours Duration of time and a service level

within which a business process must be restored after a disaster

(or disruption) in order to avoid unacceptable consequences

associated with a break in business continuity

2

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3 IT Usage IT User

Satisfaction Index

% (Number of Employees expressed

Satisfaction / Sample size of employees interviewed)

100%

4 IT Usage Power Usage Effectiveness

Nos. Amount of power entering a data centre / Power used to run the

computer infrastructure within Data Centre

5 IT Usage Employees / Desktop

Ratio

% No. of Desktop / No. of Employees *100

100%

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Assam: Capacity Development of the Assam Power Sector Utilities – Final Report – Transmission VI-128

VI SUMMARY OF ACTION PLAN


(mUSD) Expected Result

Implementation

time

Implementation

Responsibility

BUSINESS PROCESSES

1 Short term Functional Process of SCADA work No additional cost Work

Awarded under progress

i. System visibility to the SLD operator through SCADA and

communication Mechanism in ensuing Real time data and

Real time net work analysis.

ii All the required information

Transmission system can be collected on-line.

iii. TSAIDI -Average Transmission Circuit

Interruption Duration Index.

iv. TSAIFI - Average

Transmission Circuit Interruption Frequency Index.

v. Energy Losses and peak power losses in the system

6 Months Executing Agency to be monitored by

Project monitor wing

2 Short term Functional i. E-tendering software 40.00 (0.089

mUS$)

Complete tendering process

will become very transparent and easier to process and

award the work

6 Months Procurement wing

AEGCL

3 Short term Functional ii. Project management software 10.00 (0.022 mUS$)

Completing and commissioning the projects within schedules

6 Months Project monitor wing of AEGCL

4 Short term Function and

Technical

Definition and implementation of

Metering Architecture

Definition in-

house. Implementation

to be defined

Detection of all areas with high

losses.

6 months Corporate office

AEGCL

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Implementation

time

Implementation

Responsibility

5 Medium term

Technical and functional

Reduction of Technical losses approximately Rs 17500 Lakhs

(38.89 mUS$)

i. An annual energy savings of about 115 MU

ii. The investment can be recovered within about 6.1

Years

2 Years Design, procurement and

project implementation

wing

6 Medium term

Technical Preparation of manuals as listed in the Para above

No additional cost to be done

by the committees

constituted among the

AEGCL staff

The working knowledge staff will be improved

2 Years Corporate office AEGCL

7 Medium term


IT Implementation and Software procurement as per the list

indicated in the Para 2.3.1.b.4) excluding Item 2 and 3 Above

About Rs 200 Lakhs (0.44

mUS$)

Easy in computation of all the Required performance

parameters and Monitoring all the activities of AEGCL

2 years Corporate office AEGCL

8 Medium

term

Technical Standardization of Transmission line

designs

i. There will be

about 20 designs in all

the voltage classes.

ii. The cost would be around

Rs 50.0 Lakhs (0.11mUS$)

including shop drawings and

foundation deigns

i. reduces the time and cost for

type tests ii. reduces the time for

technical and price bid evaluations and according

approvals for drawings and designs

2 years Design and

procurement wing

9 Medium and Long term


Imparting continuous Training to the Staff

Approximately Rs 50.0 Lakhs

per annum which will be

The staff will gain knowledge and bring efficiency and quality

in all spears of AEGCL

Continuous process HRD wing of AEGCL

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Implementation

time

Implementation

Responsibility

about 1.0 % of Rs 50.0Crores

annual establishment

charges of AEGCL

10 Long term Technical and

functional

SCADA operation and Un manned

operation of All Substations

To be assessed

after examining each breaker

and isolator at each of the 51

substations approximately

Rs 2500 Lakhs (5.56 mUS$)

The establishment charges can

be reduced to a great extent on long run without laying down

the existing staff till their retirement

5 Years Policy decision to be

taken by the AEGCL and to be

implemented in stages.

11 Long term Technical and

functional

Asset mapping Transmission lines Rs 225 Lakhs

(0.5mUS$)

i. Enhances the Transmission

line availability ii. All the insulators in the

Transmission lines can be checked for its healthiness and

replaced without availing line shut downs

3 Years Maintenance wing of

AEGCL

12 Long term Technical and functional

Procurement of Hot line maintenance equipment and

Training to staff


Maintenance wing of AEGCL

13 Long term Technical and functional

The asset mapping of substations along with developing SLD and lay

outs of all the 51 substations (if not available)

Rs 5.0 Lakhs (0.011 mUS$)

Enhances the Transmission system availability

3 Years Maintenance wing of AEGCL

Procurement adequate testing

Equipment required for condition monitoring of substation Equipment

Approximately


Maintenance wing of

AEGCL

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Implementation

time

Implementation

Responsibility

ACCOUNTANCY

1 Short term Functional Activity Opening Balances on 01-04-2005 and Break-up of Assets.

Completion of break-up of opening

balance among APGCL, APDCL and AEGCL

No financial outlay

Compliance with audit objections; reliability and

accuracy of accounts

within 6 Months Combined team from the 3

companies and ad-hoc team of 2 under

Corporate Accounting Unit to

reconcile Suspense Account

2 Short term Functional Activity Accounting Setup - Appoint

Director (F) on regular basis on a minimum three years tenure.

Recurring

expenditure Rs 2 Million or US$

44 Million per year for salary

and other benefits

Consistency with Bureau of

Public Enterprises guidelines; alignment with practice of

other unbundled State owned companies; clear management

responsibility and lines of authority; timely and proper

resolutions of finance and accounting issues.

within 6 Months Government of

Assam and Chairman of the

Boards of Director.

3 Short term Functional Activity Share Capital - Convert the Share

Deposit Amount in to Paid up Capital in FY 2010-11. OR Transfer

the amount to "Unsecured Loans" from GoA.

No financial

outlay

Legal compliance within 6 months Company Secretary

4 Short term Functional Activity Classification of Expenditure for

Capital Maintenance as Capital, Revenue Or Deferred Revenue

Expenditure - Issue general guidelines with specific criteria to

decide the classification.

No financial

outlay

Full compliance with accounting

standards

within 6 Months Proposed

Accounting Application

Committee

5 Short term Functional Activity Constitution of Audit Committee

- Constitute the Audit Committee in

No financial Legal compliance; prevention

of fraud and manipulation;

within 6 Months Board of Directors /

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Implementation

time

Implementation

Responsibility

accordance with Section 292 A of the Companies Act 1956.

outlay better coordination with statutory auditor and CAG

Company Secretary.

6 Short term Functional Activity Formation of Accounting

Application Committee / Cell Separately for each Company) -

Constitute Accounting Application Committee with selected Account

Executives not exceeding three to he headed by CGM.

No financial

outlay

Control of corporate accounting

and proper application of accounting rules and standards

within 6 months Director Finance OR

Chief General Manager

7 Short term Functional Activity Internal Control System -

Outsourcing of the work to prepare Internal Control System

Rs 1 Million =

US$ .022 Million

Improved efficiency and

internal control; timely and comprehensive accounting

reports

within 6 Months Chief General

Manager / Accounting

Application Committee

8 Short term Functional Activity Maintenance of Subsidiary

Books - Identification Maintenance of Subsidiary

Books - Monitoring

Rs 1 Million or

US$22 Thousand

Compliance with Accounting

requirement

within 6 Months Corporate

Accounting Office / Accounting


9 Short term Functional Activity Important Recommendation of

AERC - Compliance

Variable

depending on the work to be

performed

Complete and reliable financial

accounts in the determination of utility revenue requirement

and tariffs

within 6 Months Accounting


10 First Functional Activity Audit Observation by Internal Audit and CAG - Compliance

Variable depending on

the work to be performed

Compliance within 6 Months Audit Committee

11 Short term Functional Activity Statement on Overdue and

Provision of Interest on such

No financial

outlay

Legal Compliance within 6 Months Company Secretary

/ CGM

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Implementation

time

Implementation

Responsibility

bills of MICRO, Small and Medium Enterprises - Show

status in Notes to Accounts

12 Short term Functional Activity Cost Audit - Appointment of Cost Auditor by all the three companies

and installation of cost accounting system

Recurring annual Rs

0.5Million or US$11

Thousand

Legal compliance within 6 Months Company Secretary / Audit Committee.

13 Short term Functional Activity Statement of Non Adherence / Part Adherence of Accounting

Polices - Develop Standard Statement format

No financial outlay

Legal compliance and alignment with Best Practice

within 6 Months Chief General Manager / Audit

Committee / Accounting

Application Committee.

14 Medium

Tem

Functional Activity Organisation of Finance and

Accounting Department

a) Revision of Service Rules for Accounting Executives and staff

including qualification criteria and performance based promotion

system

b) Proper balance of Executive Level and Supporting staff

complement

Recurring yearly

Rs 7.2 Million or US$160

Thousand

Timely and complete

performance of accounting functions and processes

18 Months

Director Finance

HRD with CGM

Accounts

15 Medium Tem

Functional Activity Capability of Accounting System to Generate Timely and Reliable

Reports

a) Computerisation of Accounting

System with on-line network;

b) Review all Accounting Heads,

Rs 10 Million or US$22

Thousand

Enhanced capability to generate timely, complete and

reliable reports

18 Months Jointly by Account Application

Committee and

Company Secretary.

Accounting

Application

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Implementation

time

Implementation

Responsibility

prepare an Accounts Hand Book, Manuals and Standard Formats.

Committee / Corporate Account

Office.

16 Medium Tem

Functional Activity Board to direct Accounting Application Committee to be

Responsible for Compliance

No financial outlay

Legal Compliance 18 Months Accounting Application

Committee

17 Medium

Tem

Functional Activity Fixed Asset Register/Assets Not

in Use or Abandoned. Creation of Fixed Asset Register be external

appraisal experts and chartered accountants

Rs10 Million or

US$22 Thousand

Fair and true picture of

companies' assets and compliance with AERC

requirements

18 Months Chief General

Manager (Technical) with the Assistance

of Accounting Application

Committee.

18 Medium Tem

Functional Activity Capital Work in Progress - Capitalisation of completed works

that are still classified as CWIP.

No financial outlay

True and fair picture of company's assets

18 Months Chief General Manager (Technical)

with the Assistance of Accounting

Application Committee.

19 Medium

Tem

Functional Activity Accounting for Stores and

Inventory - Develop the updated Stores Manual. Complete

Computerisation with on-line networking capability

Rs10 Million or

US$22 Thousand

Proper management of stores

and inventory; correct signals to procurement; prevention of

theft and pilferage

18 Months Chief General

Manager (Stores)

Accounting Application

Committee.

20 Medium

Tem

Functional Activity Internal Audit - Strengthen teams

at AEGCL.

No financial

outlay

Strengthen internal control 18 Months Director Finance /

CGM / Audit Committee.

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Implementation

time

Implementation

Responsibility

21 Medium Tem

Functional Activity Custody of Accounting Records - Set up a proper Accounting Record

Room at Corporate Offices of the three Companies.

Rs 1 Million =

0.22 US$ Million

Legal compliance 18 Months Accounting Application

Committee.

22 Long term Functional Activity Convergence of IFRS with

Accounting Standards - Outsource convergence work to a

Competent Chartered Accountant Firm. Mandatory participation of

account executives in the work.

To be

determined

Convergence 24 Months Chief General

Manager

FINANCIAL MANAGEMENT

1 Short term Institutional Organisational Autonomy:

ASEB to provide autonomy to

APDCL in the financial management of externally provided funds for

capital expenses such as those in the form of grants; concessional

loans from National and State Agencies and regular financing

facilities from secured from financial institutions.

No financial outlay

Better financial planning and management by the utility and

enhanced financial independence

1 to 6 months GOA

2 Medium

term

Functional Risk Management System:

Designation of Official in charge of Risk Management and Adoption of

Risk Management Policy. Risk policy to include:

a) Group Insurance Cover for Employees and Network

(Including Grids).

b) Cash transit insurance to be

Insurance

premium for policy.

Based on NDPL’s experience,

Approx. 20USD per year for

2000 USD cover

per employee ;

Savings in utility out of pocket

costs for workers’ related injury and compensation.

Employee’s security through insurance cover results in

employee’s satisfaction and timely settlement of claims.

6 months to 1 year

HR. Chief Engineer

Distribution and CGM(F)

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Implementation

time

Implementation

Responsibility

taken in sub division/ICRA with daily cash collections beyond a

specified amount and based on geographical condition of the

sub division/ICRA such as their distance to the nearest bank.

Approx. 360 USD/year for

0.2 Million USD Cover For Grid

Station

Bank charges 1

USD per 1000 USD. for Bank

taking responsibility of

the cash

3 Short term Functional Fund Management System:

a) Dismantling of the centralised

cash management system

b) Restructuring of GOA loans

and other loans that are in arrears

Clarify repayment schedule of ADB loans

No financial

outlay

No financial

outlay

Financial autonomy

Avoidance of additional financing charges and better

financial management.

Within 6 months

Within 6 months

ASEB in its capacity as project manager

for the projects funded by these

loans ; Boards of Directors of the

utilities; and Finance Directors

4 Medium

term

Functional Budget Management System:

Adoption of systematic budgeting

process backed up by an automated

Management Information System

Approximately

12,000 USD/year for

the salary of a new hire budget

officer whose main

responsibility

would be the management of

the budget.

ERP cost

approx.

More accurate budgets and

control of variances.

6 months to 1 year DGM Finance

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Implementation

time

Implementation

Responsibility

US$20 Million

5(1) Medium term

Functional Working Capital Management:

Adoption of Working capital

management policy

No financial outlay

Better management of working capital; enhanced liquidity

6 months to 1 year CGM Finance

Short term Functional a) Cheques and cash collected at Subdivision /ICRA should be

deposited on the same day to the collection account.

Control measures:

• Daily remittance sheet (DRS) to

be sent by ICRA/Sub divisions to Corporate office stating cash

and cheque collected and cash and cheque deposited into bank

account.

• Daily reconciliation between

cash and cheques collected with cash and cheques deposited into

bank account.

• Monthly reconciliation statement

between cash and cheque collected with amount credited

to consumer’s account to be submitted to corporate account.

• Monthly details of bounce cheques and debit of consumer

account.

No financial outlay

Opportunity cost from foregone interest on deposit.

At most 6 months

SMR-Sub division

Short term Functional b) Adoption of policy that would require the payment by cheques of

bills exceeding a minimum amount,

Administrative cost only

Handling of cheques is easy as compare to cash. Promoting

cheque collection could

At most 6 months

CGM (F)

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Implementation

time

Implementation

Responsibility

say INR 10,000.

mitigate risk for cash loss.

Short term Functional

c) MRR of all sub divisions needs to

be added to derive the amount that could be recovered from employees

and other ASEB undertakings/premises.

Management policy to recover the outstanding amount from employee

and other establishment.

Control measure:

• Monthly report to be generated about the outstanding dues and

sent to HR for the recovery of dues.

NIL

Amount outstanding of 3.568

Million USD as per GEC-1 monthly revenue statement

(MRR) for the month ended December’ 2010 The

cumulative effect of total amount outstanding may be

very high seeing the number of Circles to be sub division/ICRA

is 15.

6 months CGM (F) and CGM

(D)

Short term Functional Billing software to provide ageing

analysis of the receivable and Immediate disconnection of the

connection after expiry of the grace period.

Software

modification charges to be

quoted by software

provider.

As per MRR Statement of

2009-10 total outstanding 75.774 Million USD with days

receivables at 104 days. As per monthly billing cycle and

disconnection process on non payment, receivable to the

tune of 60 days are acceptable. So receivables for 44 days

could be avoided on prompt disconnection and Opportunity

cost of receivables amounting to 51.584 Million USD could be

saved.

6 months

Commercial

Department

Medium

term

Technical Billing software to include

temporary connection billings.

Software

development charges to be

paid to external

Increased billing efficiency and

management of receivables. If billing efficiency of the utility

increase by 1% the expected

6 months to 1 year CGM (Comm.), CGM

(F).

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Implementation

time

Implementation

Responsibility

experts. increase in stabilised revenue of utility is up to the tune of

0.278 Million USD per year.

6 Long term Functional Inventory Management System:

Introduction of computerised

inventory management system as part of ERP

App 1 to 1.5 Million USD for

the Cost of hiring external

expert to develop

computerised Inventory

Management system and

conduct staff training.

Software and hardware cost

included in the ERP cost

estimate

Elimination of inventory losses through obsolescence, fraud

and waste. Inventory losses estimated at 3.714 Million USD

for Financial year 2009. (provision for stock as per

balance for the period ended

31st march 2009)

In NDPL’s Case:

Savings due to on-line

indenting for stores- 44000 USD per year

37% reduction in overall inventory after implementation

of ERP solution within 3 years. The value of inventory came

down from 21.5 mUSD to 13.6 mUSD. The opportunity cost of

7.924 mUSD could be saved on account of ERP

implementation.

42% reduction in slow moving

inventory. After implementation of ERP solution

for inventory management NDPL could able to bring down

within 3 years. The value of

slow moving inventory from 9.218 mUSD to 4.798 mUSD.

The opportunity cost of 3.9 mUSD could be saved on

account of ERP implementation.

2 to 3 years including training

CGM (D), DGM (CSD) and CGM (F)

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Implementation

time

Implementation

Responsibility

7 Medium term

Functional Procurement Management System

a) Centralised purchasing at head

office of Category A and B materials but directly delivered to stores in

the requisitioning zones/ fields and issued as per requirements.

No financial outlay

Savings estimated at 5-10 % of total purchase from bulk

purchase discounts. Elimination of inventory losses through

obsolescence, fraud and waste. Inventory losses estimated at.

3.714 mUSD for FY 2009..(Provision for stock as

per balance for the period

ended 31st march 2009)

6 months to 1 year to identify and issue

invitation to prospective suppliers

to join bidding

CGM (D), DGM (CSD) and CGM (F)

8 Medium

Functional

b) Aggregated purchasing by

neighbouring zones of categories C and D materials to avoid

overstocking of materials that are used in common by these zones.

No financial

outlay

Included in above estimate 6 months to 1 year

to identify materials that could be subject

to aggregated purchasing; to

identify and issue invitations to

prospective suppliers and to conduct

bidding

CGM (M), CGM

(Zones), CGM (CSD), CGM (F)

9 Medium Technical c) Introduction of Rate Contract mechanism for the procurement of

inventory by field; zones.

No financial outlay

Savings from purchases at rate contracted rather than at prices

higher than standard is estimated at 5-10% of total

purchase cost.

Medium CGM (M); CGM (D); CGM (F)

HR MANAGEMENT

1 Short term Functional Develop and establish a Human Resources Steering Committee

(HRSC):

1.1 Obtain approval for terms of reference and modus operandi

1.2 Create a HRSC, including

Indirect costs of HRSC member

Participation

borne by the 3 utilities?

A process to:

a) drive, facilitate and

coordinate the numerous HRM,

Training and Capacity Building initiatives of this consultancy

and

2 wks.

The 3 utilities management

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Implementation

time

Implementation

Responsibility

appointment of members

1.3 Develop and commence

execution of an overall HRSC communication plan

1.4 HRSC develops and communicates its first Quarterly

Action Plan per the guidelines

b) Ensure momentum for longer term reform and

changes in these areas

1 mo.

6wks.

2 mo.

2 Short-Long term

Functional Enhancing the HR function:

2.1 Propose HR Structure and

Staffing

2.2 HRSC to obtain necessary

approvals

2.3 Sanction CGM HR position and

/approval of role definition for CGM HR

2.4 Hire CGM HR

2.5 Hire university MBA HR

graduate

2.6 HR orientation and presentation

of action plans for HRSC2.7 Specify criteria, competencies

and selection process for internal candidates

2.8 Approve preliminary HR/Training organisation and

staffing

2.9 Hire HR executive trainees (1st.

batch) MT

2.10 Conduct training for new HR

management trainees MT

2.11 Hire HR executive trainees (2nd

AEGCL Staff Costs

Transco

manpower budgets

Transco

manpower budgets

Lay the groundwork for an HR function that:

a) supports the many HRM and Training initiatives required for

the reform of the three utilities and

b) supports the processes required by the three utilities

to effectively manage their human resources in a manner

that is consistent with modern day practices, that strengthens

achievement of corporate goals and that results in a motivated

and engaged workforce

(2.1) 2 wks.

(2.2) 2 wks.

(2.3) 6 wks.

(2.4) 2 mo.

(2.5) 2.5 mo.

(2.6) 1 mo.

(2.7) 2 mo.

(2.8) 2 yr.

(2.9) 14 mo

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Implementation

time

Implementation

Responsibility

. batch) MT

3 Medium term

Functional Enhance Performance Appraisal system:

3.1 Develop summary of existing process

3.2 Identify relevant performance criteria

3.3 Develop Performance appraisal system for Class I and II employees

3.4 Development of Performance Appraisal System for Class III

Employees (Medium term)


participation borne by the 3

utilities?

Lay the groundwork for the three utilities to move towards

a performance based organisation, that in turn

encourages productivity and achievement of corporate goals

as well heightening staff motivation and engagement

(3.1) 4 mo.

(3.2) 4 mo.

(3.3) 6 mo.

(3.4) 2 years.

4 Short term Develop process for Organisation charts and Sanctioned Posts:

4.1 Utility designates responsible for organisation charts

4.2 Utility designates responsible for sanctioned post lists

4.3 Utility designates responsible for monitoring and reporting

organisation charts and sanctioned post lists

4.4 System to be dovetailed with Manpower Planning System -MT

(Medium term)

Distribution + Genco and

Transco budgets?

Provide the essential foundation for: (a) making

improvements in the strategic management of human

resources. (A requisite for analysis and consideration of

HRM process and policy development) and (b) fiscally

responsible and transparent control of people costs

(4.1) 3 mo.

(4.2) 3 mo.

(4.3) 3 mo.

5 Short term Functional Organisation (current) design for all 3 utilities

5.1 priority preparation and approval of organisation charts for

all three utilities


Transco budgets?

First application of the results described above

(5.1) 5 mo

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Implementation

time

Implementation

Responsibility

6 Short term Functional Manpower norms: (Distribution

only)

6.1 review manpower norms for NDPL, MSEDCL or others.

6.2 Determine and recommend new manpower norms for Distribution


participation

borne by the 3

utilities?

Distribution +

Genco and Transco

budgets?

Assist the utilities in achieving manpower requirements that

are consistent with sector benchmarks and that are both

cost effective and fair

(6.1) 3 mo

(6.2) 6 mo

7 Short term Functional New Outsourcing:

(Distribution only)

7.1 review potential for new outsourcing

7.2 Determine and recommend new areas for outsourcing


Transco budgets?

Assist the utilities in achieving staffing practices that are

consistent with sector benchmarks and that are both

cost effective and fair

(7.1) 3 mo

(7.2) 5 mo

8 Short term Functional Creation of Legal Section:

8.1 Approval of each utility

8.2 Developing role description

8.2 Hire Law Officers/Staff

Distribution +

Genco and Transco Staff

costs

Introduce into the utilities a

skill and expertise that has heretofore been found to be

seriously lacking (current demand internally for this skill

and expertise, which is now being performed by ill qualified

people whose main role is being detracted)

(8.1) 2 mo

(8.2) 4 mo

9 Medium-

Long term

Technical and

Functional

Develop Human Resources

Information System (HRIS):

9.1 Comprehensive list of

information needs

9.2 Develop HRIS

Indirect costs of

HRSC member

participation

borne by the 3 utilities?

Distribution +

Lay the groundwork for the

development of a system that is the cornerstone for effective

(including cost effective) HRM , both in its developmental and

on-going maintenance phases

(9.1) 4 mo

(9.2) 6 mo

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Implementation

time

Implementation

Responsibility

Genco and Transco

budgets?

10 Medium-Long term

Functional Develop Manpower Planning (MPP) System (Recruitment Plan)

10.1 Comprehensive list of information needs

10.2 Develop MPP system


Participation borne by the 3

utilities ?

Distribution +

Genco and Transco

budgets?

Lay the groundwork for the development of a system that

is integral to effective and strategic HRM

(10.1) 6 mo. .and

on-going

(10.2) 1 yr. and on-

going

11. Medium term

Functional 11.1 Establishing current norms for key processes in AEGCL

11.2 Team to study discos and submit report

11.3 Approval of norms and outsourcing philosophy

11.4 Extrapolate internal data with 11.3 and determine action plans

11.4. Create continuous Pipeline of talent –through induction level

trainee schemes

Response to dealing with large scale retirement

12. Medium term

Functional Establishing Automated Attendance

Record System

12.1 In-principle approval and go ahead

12.2 HRSC to evaluate various systems, costs etc. for

implementation

Costs would be contingent upon

coverage and nature of

system opted for

Basic requirement, accuracy and speed in processing data

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Implementation

time

Implementation

Responsibility

12.3 HR/IT to implement

13.

Medium term

Functional Motivating Employees: Developing policy based on practices, approval

and implementation of:

13.1 Non-financial/Financial

incentives for improved performance

13.2 Special facilities/allowances for postings in remote areas

13.3 Communication Program and planned visits to other utilities to

energize

14 Long term Functional Develop enhanced Promotion system:

14.1 Assess the effectiveness of implementation of target linked

performance based appraisals14.2 Identify

roadblocks/ acceptance of ‘out of turn’ (read seniority based)

promotions by stakeholders

14.3 develop recommendations for

promotion policy

14.4 Gain approval and

implementation


participation

Start the momentum towards performance oriented utility

organisations with motivated and engaged staff

(11.1) 2+ yrs.

(11.2) 2+ yrs.

(11.3) 2+ yrs.

(11.4) 2+ yrs.

IT

1 Short term Functional Basic Level IT Infrastructure in all offices

0.6 Better communication among the workforce and more

reduction in manual working

4 Implementation Partner, IT Task

Force

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Implementation

time

Implementation

Responsibility

2 Short term Functional Management Information System on Software as a Service (SaaS)

basis

0.2 Better control on the organisations processes


Force

3 Short term Technical Implementation of Basic Level Enterprise Resource Planning (ERP)

System (Phase – 1) for Finance, Project Management, Material

Management, Maintenance Management

2 Better control on the core and support processes of the

organisation in an integrated manner


Force, respective Department

Representatives

4 Short term Technical Tower Design Testing Software 0.1 For better performance from

the towers

2 Implementation

Partner, IT Task Force

5 Medium

term

Technical Load Forecasting System 0.1 For better planning 6 Implementation

Partner, IT Task Force, Operation

Wing

6 Short term Functional Facility Management System 1 For better availability and maintenance of IT

Infrastructure


Force

7 Medium term

Functional Knowledge Management System 0.1 For improving the knowledge of utility work force on latest

happening and current trends. Sharing of best practices within

the organisation


Force

8 Medium term

Functional E-Tendering Software 0.1 Complete tendering process will become very transparent

and easier to track.


Force

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Implementation

time

Implementation

Responsibility

9 Medium term

Technical Implementation of Enterprise Resource Planning (ERP) System

(Phase – 2) for HR, Performance Management System.

0.8 It will help in maintain the employee details, payroll

system, and will also help in maintaining the company

balanced score card.


Force, respective Department

Representatives

10 Medium term

Technical SCADA System 2.4 It will help in centrally monitor the grids performance and with

little manual intervention.


Force, Operations Wing

11 Long term Technical Geo-graphical Information System

4.0 For graphical mapping the

assets on the satellite imagery

12 Implementation

Partner, IT Task Force, Field Support

Team

12 Long term Technical Disaster Recovery Management System for Critical Applications

2 It will help in Disaster Management for Business

Continuity.


Force

13 Long term Technical Enterprise Application Integration (Integration of the ERP System with

GIS and SCADA Systems)

1.6 It will help in free flow of data from the source system to all

the systems wherever it is required, instead of manually

uploading the data in secondary systems.


Force

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Assam: Capacity Development of the Assam Power Sector Utilities – Final Report – Transmission VII-148

VII ANNEX TO CORE BUSINESS

1. MAINTENANCE ACTIVITIES MEET BY INDIAN

TRANSMISSION COMPANIES.

1.1. SUBSTATIONS’ POWER EQUIPMENT MONITORING

1.1.1. POWER TRANSFORMERS:

• DGA Test.

• Partial discharge measurements.

• P.I. value.

• Die-electric Discharge test.

• Recovery voltage measurement.

• Sweep Frequency resonance analysis (SFRA)

• Transformer oil condition monitoring:

o Resistivity.

o Tan delta.

o Flash point.

o IST – Inter phase tension.

o BDV.

o Acidity.

o Moisture content – PPM.

• Winding:

o Computation of surge with stand capacity.

o Voltage test distortion

o Short circuit Test

o Open circuit Test.

o Winding resistance on all taps.

• Test on Tap changer.

• Bushings:

o Tan Delta.

o Capacitance measurements.

1.1.2. CIRCUIT BREAKER:

• Dynamic contact resistance measurement (DCRM).

• Timing measurements of Closing and opening coils.

• Verification of closing and tripping time.

• Over damping and under damping.

1.1.3. C.T. & P.T:

• Meggar test.

• Tan delta.

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1.1.4. SURGE ARRESTORS: (GAP LESS ZINC OXIDE).

• Third Harmonic resistivity.

• Leakage Test

1.2. TESTING EQUIPMENT

• Digital Earth Tester

• Transformer Winding Resistance Meter

• Contact Resistance Meter

• Automatic relay test kit (3 phase)

• Circuit Breaker Operation Analyser with Dynamic Contact Resistance Meter(DCRM)

• On-line Dissolved Gas Analyser

• Leakage current monitor for lightning arrester

• Frequency Response Analyser for Transformers.

• Partial Discharge Measuring Equipment for Transformer / reactor / instrument transformer etc.

• Automatic Capacitance and Tan Delta meter.

• Thermo-vision cameras

• Hot line maintenance equipment

1.3. ROUTINE MAINTENANCE

• Routine inspection of Transmission lines and providing missing/stolen tower parts.

• On-line Testing of the Transmission line insulators and Replacement of faulty insulators using

Hot line maintenance equipment without availing line shut downs. This is one of the reasons for

maintaining high system availability.

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2. GAPS AND IMPROVEMENTS RELATED TO PROCUREMENT,

CONSTRUCTION, OPERATION AND MAINTENANCE

Bellow are listed the major gaps and improvements that can be made related to Procurement,

Construction, Operation and Maintenance.

1. Revision / Updating Technical specifications

Technical specifications are to be updated every year by introducing the latest techniques and based

on the feedback from Engineering and operation Services departments. A separate committee is to be

formed for periodical review & updating the technical specifications of all equipment & materials for

transmission lines & substations.

2. Action to be initiated to reduce the Time for Bid evaluation & issue of LOA

• Time for bid opening, bid evaluation, LOA and PO to be brought down to 90 days from

the date of receipt of the proposals to the issue of the LOA/Purchase order;

• Bid Notification to be issued within 15 days from the date of receipt of proposals from

Planning section;

• Bid closing time to be limited to maximum of 45 days from date of notification including

pre bid conference against the present practice of 42 to 78 days;

• Technical bid evaluation to be completed with 10 working days from technical bid

opening against the present practice of 30 to 107 days;

• Price bid evaluation to be completed within 10 working days from the price bid opening

date against the present practice of 17 to 62 days;

• Issue of work ward to be within 7 working days from the date of approval of competent

authority against the present practice of 7 to 30 days;

• Completion period is 24 months from contract signing for all the works. The same to be

reviewed and examined for reduction ranging from 12 months to 18 months for 132 kV

& 220 kV works respectively.; and

• The item wise work schedules to be furnished by the contractor to match with the

completion period and the same to be incorporated in the Purchase order for effective

monitoring of the progress of each item of work.

3. Quality Assurance

• Strict quality assurance and quality system management to be enforced to facilitate the

quality of equipment and materials.

• The Quality Management System to be followed by AEGCL should be built around a

philosophy of "prevention" rather "detection and cure". The quality Management system

is time tested and to have an ISO-9001 certification, similar to POWER GRID. (The ISO

certification for Power grid from EAQA, UK through NQA, India, and it is the first utility

in the Power Sector to have ISO – 9001 Certification.)

• The Various Steps involved in the Quality System Management are:

o Inclusion of Quality Requirement in the Contract

o Selection of good quality vendors/sub vendors

o Approval of unambiguous Manufacturing Quality Plan (MQP)

o Finalization of Field Quality Plan (FQP)

o Ensuring regular, timely and consistent inspection at various stages, viz.

Raw material, during in- process stage and final inspection and testing prior

to dispatch.

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o Analyse the equipment failures in association with Engineering and Operation

services departments and use feedback for improvement of systems.

o Implementation of Quality Systems and Procedures as per ISO – 9001

4. System of Vendor and Sub Vendor Approvals

The list of approved sub vendors is to be maintained for all the sub vendors irrespective of the fact

whether the Technical Qualifying Requirements are specified in the contract or not. The contractors

can choose any sub vendor from the list possessing a large number of sub vendors to choose from,

with full transparency. The list is continuously revised based on the feedback obtained from the

inspection reports, surveillance audits and failure reports, etc.

5. Manufacturing Quality Plan

A standard format (such as developed by POWERGRID) is to be developed for the approval of

Manufacturing Quality Plan (MQP) which includes the quality requirements at the raw material stage,

In process testing and final inspection and testing requirements as per Technical specifications of the

contract, National and International Standards and Manufacturer’s internal plant standards and well

known good engineering practices of the industry. This document has to be self-sufficient and it

should include sample size, acceptance norms, place of testing, requirements of test reports and hold

point beyond which the work can progress only after clearance from the utility. By standardizing the

various testing requirements and procedures it is to be ensured that it is not biased towards any

particular manufacturer. These MQP(s) may be approved for a period of three years instead of

approval on contract-to-contract basis; this alone could reduce the project execution time

substantially by eliminating the requirements of submission of MQP, discussions and approval for

each contract.

6. Inspection

Customer Inspection Points (CIP) are identified in MQPs to be carried out at various stages such as

raw material stage, in-process stage and final stage. A certificate known as CIP is to be issued at

each stage, if the material/product/Sub System meets the various requirements specified in the

specification, Standards, Approved data sheets/Drawings etc. In other words issuance of CIP certifies

the various routine checks and technical features. However it does not certify the various contractual

obligations, which are necessary for release of payment. Material Inspection and Clearance Certificate

(MICC) is to be issued for all billable items as per contract after all the CIP stages, type tests, Bill of

Quantities and other requirement are checked by the inspection engineer. Issuance of MICC does not

require any inspection of the equipment but it requires checking of other contractual documents. It is

a responsible job as it enables dispatch and payment to the contractor. Inspection is most critical and

important activity in the quality system.

7. Project work schedules

• The item wise work schedules to be furnished by the contractor to match with the

completion period and the same to be incorporated in the Purchase order for effective

monitoring the progress of each item of work.

• All the projects being executed are delayed and not completed & commissioned in the

schedule time frame.

• The penalty clauses as per the Purchase orders are to be strictly enforced against the

contractors for the delay in work execution.

• An Atmosphere to be created to facilitate the contractors for completing the projects

within scheduled time frame.

8. Construction

• Project Management & Monitoring

• Project management and monitoring is one of the most important aspects of project

execution on schedule with control on cost overrun. The project management starts

from the beginning of the project concept itself. A detailed Master Network is to be

prepared for each project for completion of the project on schedule. The network should

MERCADOS EMI - NDPL


incorporate all the activities involved and the time for completion of each activity. The

contractor is also required to prepare a network schedule of activities for completion of

work within time frame as per the contract awarded on him. Both the schedules are

properly coordinated. Project monitoring is to be regularly carried out by a dedicated

group through review meetings and status report is to be put up to the management.

The monitoring parameters include financial as well as physical progress parameters. In

the review meetings various hold points/ needs to be discussed and resolved

• The item wise / Project wise progress of project monitoring to be effectively done as per

the work schedules mentioned in the purchase orders preferably using the soft ware.

9. Field Quality Plan

Field Quality Plans (FQP) should be followed for various construction activities such as Transmission

Line, Civil Construction, Buildings, Fire Fighting System, etc. The FQP(s) describe the various stages

for checks and testing requirements at each stage. The FQP defines the requirement with regard to

proper unloading/receipt of equipment and material at site, storage, testing requirements of erection

material, sampling and acceptance norms, test report requirements, pre commissioning checks. The

responsibility of implementation FQPs is with the site organizations, which are ensuring its

implementation through Project Managers responsible for construction. In order to supplement the

efforts of project manager, regional quality set- ups should be created to have more surveillance over

construction activities. Executives from the Corporate Centre may also be deputed for surveillance

and inspection.

10. Manuals

AEGCL has to prepare manuals covering all areas of site construction activities to ensure that uniform

approach in various site activities are followed by site staff and the contractors. These manuals

should be well coordinated with the provisions of specification and field quality plans.

The following standard manuals to be made available to field staff for guidance, which is not available

now:

• Construction Practices:

o Manuals pertaining to Transmission lines

o Manuals for locating the tower positions as per the approved tower schedules,

stub setting, tower foundations, tower erection, stringing and other civil works

like benching and revetment

o Manuals pertaining to Substations

o Yard Levelling

o Earth mat formation

o Control room, Cable ducts, equipment foundations, roads & other civil

engineering works.

o Equipment erection & Bus bar formation.

o Control and power cables schedules and Laying

• Quality Assurance & quality system management

• Testing & commissioning procedures.

The maintenance manuals clearly indicating the routine maintenance inspections to be carried out

along the Transmission lines and routine maintenance works to be carried out to be made available to

each of Transmission line maintenance.

Up dated Maintenance manuals clearly indicating the routine maintenance works like daily, weekly,

fortnightly, monthly, quarterly, half yearly and annual maintenance works scheduled for each

equipment and duties of shift engineers in the substations.

11. Environmental impact assessment practices

As per international & national practices the Land required for erecting towers in lands to be acquired.

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The delay in payment of compensation to the land owners as the amount is released to the

government revenue departments for payment to land owners is causing the delay of transmission

line execution/completion, as the land owners are bringing stay orders for tower foundations in their

respective fields / lands and this issue to be resolved in view of timely completion of the projects.

12. Safety control system:

The following aspects are not used in practice and need to be introduced:

• Safety policy statement

• Safety manuals

• Safety rules

• Safety standard procedures

• All of these should be made available to the field staff.

13. AEGCL’s responsibilities

This responsibility arises from:

• Providing the best practicable conditions of work from the point of view of health and safety

• Obligation to consult with its staff and their representatives to implement policies and

procedure developed as a result of discussion.

• Fulfilling statutory requirement in respect of health, safety and welfare of employees

emanating from relevant legislation such as the Factories Act, The Indian Electricity Act, etc.

AEGCL should have the following responsibilities:

• The AEGCL should recognize and accept its responsibility for establishing and maintaining a

safe working environment for all its employees. This responsibility arises from:

o Providing the best practicable conditions of work from the point of view of health and

safety

o Obligation to consult with its staff and their representatives to implement policies

and procedure developed as a result of discussion.

o Fulfilling statutory requirement in respect of health, safety and welfare of employees

emanating from relevant legislation such as the Factories Act, The Indian Electricity

Act, etc.

• The AEGCL shall take all such steps which are reasonably practicable to ensure best possible

conditions of work, and with this end in view the Company shall do the following:

To allocate sufficient resources to provide and maintain safe and healthy conditions of work

To take following steps to ensure that all known safety factors are taken into account in the

design, construction, operation and maintenance of machinery and equipment of substation

and transmission lines.

o To ensure that adequate safety instructions are given to all employees.

o To provide wherever necessary, protective equipment, safety appliances and

clothing and ensure their proper use.

o To inform employees about material, equipment or processes used in their work,

which are known to be potentially hazardous to health or safety

o To keep all operation and methods of work under regular review for making

necessary changes from the point of view of safety in the light of experience and up-

to-date knowledge.

o To provide appropriate facilities for first aid and prompt treatment of injuries and

illness at work.

o To provide appropriate instruction, training, retraining and supervision in health and

safety and first aid and ensure that adequate publicity is given to these matters.

o To ensure proper implementation of fire prevention and appropriate fire fighting

services, together with training facilities for personnel involved in this service.

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o To ensure that professional advice is made available wherever potentially hazardous

situations exist or might arise.

o To organize collection, analysis and presentation of data on accident, sickness and

incidents involving personal injury or injury to health with a view to taking

corrective, remedial and preventive action.

o To promote through the established machinery, joint consultation in health and

safety matters to ensure effective participation by all employees.

o To publish/notify regulations, instructions and notices in the common language of

employees

o To prepare separate safety rules for each type of occupation/process involved in a

project.

o To ensure regular safety inspection by a competent person at suitable intervals of all

substation equipment, workplaces and operations

o To co-ordinate the activities of the Company and of its contractors working on the

Company’s premises for the implementation and maintenance of safety systems of

work, to comply with their legal obligations with regard to the health, safety and

welfare of their employees

14. Responsibility of the employee

The establishment and maintenance of best possible condition of work is, no doubt, the responsibility

of Management, it is also necessary that each employee follows prescribed safe methods of work. He

should take reasonable care for the health and safety of himself, of his fellow employees and of other

persons who may be affected by his action at work. With this in mind, employees should be healthy

and safety conscious in following aspects:

• Report potential hazards and Observe Safety Rules, procedures and code of practice

• Use with all reasonable care the tools, equipment, safety equipment and protective clothing

provided by the Company; these items should be kept in good condition

• Participate in safety training courses when called upon to do

an active and personal interest in promoting health and safety at work.

15. ISO – 9000 Certification

In order to carry out activities involved effectively, it is highly desirable that AEGCL obtained ISO-

9000 certification. As for instance, POWERGRID has obtained ISO-9000 certification from M/S BVQI

the accrediting agency for all its system manuals and procedures. Most of the departments and

activities are covered under ISO ambit. The head of each department is responsible for

implementation of ISO procedures and head of the organization is responsible for ensuring adherence

to ISO systems in the organization. Regular internal audit of all departments is carried out and

surveillance audit by external auditors is carried out as per the periodicity stipulated in the ISO-9000

standards. POWERGRID has secured ISO-9000 certification since 1994 and continuance of the same

has been consistently confirmed by the accrediting agency as per the recommendation of their

surveillance auditors who carry out audit on their behalf.

16. Training to field staff in construction activities

The periodical training to be imparted to the field staff involved in construction activities.

17. Training to planning of system strengthening and system expansion wing

• Long term load forecasting as per the National & International practices

• Net work modelling

• Load flow studies.

• Short circuit studies.

• Stability studies.

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• Techno-economical analysis.

• Substation & Transmission line designs.

• DPR preparation & Budget proposal preparation

18. Training to maintenance staff

The regular/periodical training to be imparted to the maintenance staff of substations and

transmission lines of transmission system in the following fields which is not being given till now

• Maintenance procedures in substation

• Condition monitoring of substation equipment

• Monitoring of scheduled maintenance works

• Asset mapping and asset management

• Routine testing of substation equipment including DGA, Earth resistance, Tan delta, circuit

breakers, etc.

• RLA of substation equipment

• GPS survey of substation equipment and transmission line towers/poles and monitoring

through GIS software

• Safety and control procedures in substations and transmission lines

• Procedures for accident investigation, safety risk analysis

• Energy audit of transmission system

• Substation wise and transmission line wise

• Hot line equipment & Hot line working

• Use of Thermo vision cameras

19. Routine Training to the MRT staff

• System protection & Protection coordination

• Testing & commissioning of substations

• Routine testing of substation equipment

• Failure analysis of the equipment

• Latest trends in quality improvements of EHV SS

• Training of the MRT staff at the protection equipment manufacturer's plant for new type of

relays being supplied against the Pos

20. Training to Procurement wing staff

• Preparation of Bid documents:

• IFB, ITB, GCC, ECC, SCC, BPS, Price schedules

• Issue of NIT

• Technical & Commercial Evaluation

• Issue of LOI,LOA & POs

21. Training to Construction / Execution wing staff

• The Project management systems and project monitoring soft ware

• Construction / execution and testing & commissioning procedures in Transmission lines &

substations

• Safety procedures

MERCADOS EMI - NDPL


• Environmental impact assessment practices

• Material accounting procedures at the site

• Verification of contractor's Bills & certification

• Documentation of Approved Drawings, Test results of equipment during Testing &

commissioning, Assets and handing over to Maintenance staff

22. Training to SLD operations wing staff

• Real time power flow analysis using soft ware

• Maintenance of grid discipline

• Power Trading techniques

• Computation of:

o TSAIDI - Average Transmission Circuit Interruption Duration Index

o TSAIFI - Average Transmission Circuit Interruption Frequency Index

o Energy Losses and peak power losses in the system

o Computation of annual % Transmission availability

o Total time of grid Black outs & brown outs during the year

o Available capacity of transmission system for open access

o Energy accounting and Energy Audit – System wise, Substation wise

23. Training to Regulatory affairs wing staff

• ERC filing

• Tariff failing

• Complying with the regulatory directions

24. Software

• The following software should be procured:

Table 20 - Software to be procured

Department Software

Planning of System strengthening

& System expansion wing

i. Load fore cast software

ii. Tower design testing software

MRT staff Soft ware Relay Co-ordination

Procurement wing E- Tendering soft ware

Construction / Execution wing The Project management systems and project monitoring

soft ware

Maintenance staff of Transmission

lines & substations

Asset mapping & management soft ware along with GIS soft

ware

MERCADOS EMI - NDPL


SLD • Power system soft ware for conducting real time load

flow analysis.

• Software for computation of:

o TSAIDI - Average Transmission Circuit

Interruption Duration Index

o TSAIFI - Average Transmission Circuit

Interruption Frequency Index

o Energy Losses and peak power losses in the

system.

o Computation of annual % Transmission

availability.

o Total time of grid Black outs & brown outs

during the year.

o Available capacity of transmission system for

open access.

o Energy accounting and Energy Audit – System

wise, Feeder wise, Substation wise

Regulatory affairs wing ERC & tariff failing software

• The software for Maintenance and monitoring of substations and Transmission line to be

procured /developed for effective maintenance of transmission system comprising both

Substations and transmission lines.

• The protection co-ordination is being done analytically at present and it is therefore difficult to

obtain results for the interconnected transmission system. This should be done by means of

software.

• Project management systems and project monitoring software: for effective project wise and

item wise monitoring.

25. Major Testing Equipment Requirement

• Relay testing kit.

• Meter testing kits including high precision digital substandard meters

• Thermo vision cameras.

• Circuit breaker testing kit.

• Oil testing kits.

• GPS instruments.

• Hot line equipment.

• Emergency restoration of Transmission line equipment in case of tower collapse

26. Transmission lines

• The Maintenance manuals

The maintenance manuals clearly indicating the routine maintenance inspections to be carried out

along the Transmission lines and routine maintenance works to be carried out to be available to each

of Transmission line maintenance unit. No such manuals are made available now.

• Asset mapping of Transmission lines: (Which is not yet implemented/done)

The GIS survey to be conducted capturing the each asset of transmission line viz. tower / pole /

switch etc. and keyed in to the GIS to be viewed and monitored by all the concerned for proper and

effective monitoring of attending to any technical deficiencies.

MERCADOS EMI - NDPL


27. Development of Asset strategies

• Planning & attending of condition based [predictive] and Plant overhaul / turnaround

maintenance works

• Condition monitoring of the assets

• The RLA (Residual life assessment) studies to be conducted on every substation equipment at

least 3-4 years before its life expectancy to assess its status, which reduces down time due to

unforeseen shut downs

• Measures to be taken for refurbishment and prevent failure & to increase its life.

• Taking timely action / decisions to be taken for retirement of assets, for such of the materials

which cannot be refurbished

• The digital route map of the transmission line showing the position of each tower / pole to be

created for viewing on the monitor with geographical back ground map along with attributable

data of each asset

• The schedule maintenance works of the each transmission line to be attended, and details of

the maintenance works attended as per schedule are to be keyed in to the GIS soft ware to

be viewed & monitored by all the concerned for proper & effective monitoring of transmission

lines and substations maintenance as per schedule

28. The following attributable data of each asset to be collected along with technical

deficiencies and keyed in to the GIS

• Towers / Poles:

o Intactness of all the tower parts and condition of tower/pole for rusting deterioration etc.

o Condition of painting if they are of MS & not galvanized

o Adequate ground, horizontal & vertical clearances from ground, structures respectively.

o Conductor size, condition etc.

o Ground wire

o Cross arms,

o Insulators & its condition,

o Insulator Hard ware including arcing horns,

o Conductor hard ware viz vibration dampers, conductor mid span joints

o Ground wire accessories including earth bonds, vibration dampers

o Tower accessories like, number plates, phase plates, A.C. devices, circuit plates,

o Earth electrodes and earth resistance of the tower earthling

29. Digital route map

The digital route map of the transmission line showing the position of each tower / pole to be created

for viewing on the monitor with geographical back ground map along with attributable data of each

asset, which is not available now.

30. Maintenance schedule works of each transmission line

The maintenance schedule works of each transmission line to be attended, and details of the

maintenance works attended as per schedule are to be keyed in to the GIS soft ware to be viewed &

monitored by all the concerned for proper & effective monitoring of transmission lines maintenance as

per schedule.

MERCADOS EMI - NDPL


31. Hot line maintenance equipment

Hot Line maintenance equipment for testing and replacing the insulators and attending other works

on line is not available and hence to be procured and suitable training to be imparted to the staff.

All the Transmission line insulators to be tested yearly and faulty insulators to be replaced by using

hot line maintenance equipment without availing line shut downs.

32. Hot line Puncture Detection of Insulators

All the Transmission line insulators to be tested yearly and faulty insulators to be replaced by using

hot line maintenance equipment without availing line shut downs.

33. Strict adherence to maintenance schedules

The maintenance schedules for transmission lines are not being followed strictly except trimming of

tree branches close to the lines. This should be looked in to for up keep of the transmission lines.

34. Substations

• Maintenance manual

Up dated Maintenance manuals clearly indicating the routine maintenance works like daily, weekly,

fortnightly, monthly, quarterly, half yearly & annual maintenance works scheduled for each

equipment and duties of shift engineers in the substations. At present the maintenance manual

prepared during the year 2005 which is not covering many aspects are made available at the

substations.

• Asset mapping of substations which is not yet implemented

The name plate details of all the individual equipment along with the schedule maintenance works to

be attended, and details of the maintenance works attended as per schedule are to be keyed in to the

GIS soft ware to be viewed and monitored by all the concerned for proper and effective monitoring of

substation and equipment maintenance as per schedule.

• Asset mapping of Transmission lines

The GIS survey to be conducted capturing the each asset of transmission line viz. tower / pole /

switch etc. and keyed in to the GIS to be viewed and monitored by all the concerned for proper and

effective monitoring of attending to any technical deficiencies

• Development of Asset strategies, which is not available now

• Planning and attending of condition based [predictive] and Plant overhaul / turnaround

maintenance works.

(Condition monitoring of the assets have not been done)

• The RLA (Residual life assessment) studies for Equipment health assessment is necessary to

ascertain whether the equipment is aging normally or there is abnormal degradation, which

may lead to sudden pre-mature failure. Reliability Cantered Maintenance (RCM) with an

ultimate aim of reducing the O&M Cost and carry out maintenance only when necessary to

avoid unnecessary system outage on account of periodic maintenance.

(No such study has been conducted hither to).

• Measures to be taken for refurbishment and prevent failure and to increase its life.

• Taking timely action / decisions to be taken for retirement of assets, for such equipment which

cannot be refurbished

• Thermo - Scanning: (Which is not provided now)

The thermo vision cameras to be procured and used for routine inspection of all substation equipment

to locate any hot spots developed in the equipment, which is one of the preventive measures for

equipment failures and unforeseen break downs.

• Hot Line Washing

• Nitrogen type fire extinguishers for power transformers: (Which is not provided now)

MERCADOS EMI - NDPL


All the power Transformers of 20 MVA and above shall be provided with “NITROGEN” injection drain

and stir method type fire prevention and extinguishing system, along with other associated fittings

and control equipment to prevent damage of transformers due to fire.

• Energy Audit

Transmission line wise and Substation wise energy audit to be conducted monthly which is not being

done now

• Strict adherence to maintenance schedules:

o The scheduled maintenance works in the substations are not being carried out effectively

due to following reasons:

o Availing shutdowns / Line clears are the major hurdles.

o In adequate spare parts, tools and man power

o Strict adherence to the maintenance schedules to be enforced for maintaining the

transmission system availability to required standards.

o The annual dynamic testing of protection relays to be done (This important aspect has

not been done from last 3-4 years) due to shortage of staff & testing equipment as large

number of new substations have been commissioned and most of the time the staff were

engaged in testing & commissioning new substations.

o The annual routine testing & calibration of all the meters in the substations has not been

carried out during last 3-4 years.

o The circuit breakers in the substations have not been tested annually for Breaker timing

measurements & Dynamic Contact Resistance measurements of the breakers, since the

circuit breaker testing kit is not available. The same to be procured and all the circuit

breakers to be tested once in a year

o The power transformer oil samples to be tested for DGA annually and the DGA machine

to be repaired.

o The power transformer capacitance type Bushings to be tested for Tan Delta and

capacitance measurements (which is not being done now).

35. Failure Analysis System (which is not done in practice)

A committee, whose formation depends upon the gravity of the failure and importance of the

equipment, investigates and analyses each failure. Sometimes the manufacturer is also requested to

participate in the investigation and carry out analysis of the failure. The Failure report is then

submitted to the competent authority as per the system developed and the recommendation of the

report are circulated for implementation to all concerned department. The compliance is then verified

through various internal and external audits. This is to be followed.

36. Feedback System (SIR & ISO Audit)

• System Implementation Review (SIR):

A team comprising of two to three experts who are not the part of the group under review to carry

out review audit of each group to ensure that all the construction, operation and maintenance

systems and administrative systems are implemented in the manner as stipulated as per various

manuals and procedures. The deviations are duly recorded and conformance report is then furnished

to the Corporate Operation Services, who is the monitoring agency, through regional head. This is a

very effective system and helps in high quality of workmanship and high level of availability and

reliability.

ISO Audit

• An ISO 9000 certification to be obtained for its systems and procedures to ensure

compliance to ISO requirements and the system and procedures,

• AEGCL to annually carry out internal audit of all departments at corporate office and site,

which is followed, by audit by external auditor for reconfirmation of ISO certification. This

audit system is a very effective feedback system for any correction or improvement.

Regular O&M and safety workshops/conferences are to be conducted, that works as a good feedback

system.

MERCADOS EMI - NDPL

Assam: Capacity Development of the Assam Power Sector Utilities – Final Report – Transmission VIII-161

VIII ANNEXURE TO FINANCE SECTION

The following tables present the investments plans of AEGCL.

Table 21 - AEGCL Capital Investment Plan: Total 2008-2012; and FY2008-2009

Project KV Source of

Finance

Total FY 2008-2012 Total FY 2008-2009

Total Grant Loan Equity Total Grant Loan Equity

Phase - I

A: Transmission Line

Double Ckt LILO of Silchar-Bongaigaon 400kV lone at Azara 400 NLCPR/

State plan 38.15 34.33 3.81 0.00 0.04 0.04 0.00 0.00

Total : 400 KV Line 38.15 34.33 3.81 0.00 0.04 0.04 0.00 0.00

Double Ckt LILO of Agia - Sarusajai at Azara 220 NLCPR/

State plan 9.15 8.24 0.92 0.00 0.04 0.03 0.00 0.00

BTPS - Rangia 220 ADB 152.30 137.07 15.23 0.00 0.04 0.04 0.00 0.00

Rangia - Amirgaon 220 ADB 33.85 30.46 3.38 0.00 0.04 0.04 0.00 0.00

LILO of both Ckt of Balipara - Samaguri line at Sonabil 220 ADB 8.46 7.62 0.85 0.00 0.03 0.03 0.00 0.00

LILO of one Ckt of Samaguri - line at Sonapur 220 ADB 16.93 15.23 1.69 0.00 0.04 0.04 0.00 0.00

Tinsukia - Behiating (New Dibrugarh) 220 ADB 50.77 45.69 5.08 0.00 0.04 0.04 0.00 0.00

Namrup - Mariani 220 ADB 135.38 121.84 13.54 0.00 0.04 0.04 0.00 0.00

LILO of one Ckt of Samaguri - Sarusajai line at Jawaharnagar 220 NLCPR/

State plan 9.15 8.24 0.92 0.00 0.03 0.03 0.00 0.00

MERCADOS EMI - NDPL



Finance

Total FY 2008-2012 Total FY 2008-2009


Stringing 2nd Ckt of Kathalguri - Tinsukia 220kV D/c 220 NLCPR/

State plan 6.67 6.00 0.67 0.00 0.03 0.03 0.00 0.00

2nd Ckt Stringing of Agia - Sarusajai 220 NLCPR/

State plan 12.00 10.80 1.20 0.00 0.03 0.03 0.00 0.00

Total : 220 KV Line 434.66 391.19 43.47 0.00 0.36 0.32 0.04 0.00

BTPS - Kokrajhar 132 ADB 12.16 10.94 1.22 0.00 0.04 0.04 0.00 0.00

Kokrajhar - Bilasipara 132 ADB 33.89 30.50 3.39 0.00 0.04 0.04 0.00 0.00

Bilasipara - Gauripur 132 ADB 19.81 17.83 1.98 0.00 0.03 0.03 0.00 0.00

Agia - Matia (Dudhnoi) 132 ADB 17.33 15.60 1.73 0.00 0.03 0.03 0.00 0.00

LILO of both Ckt of Kahilipara - Rangia at Kamalpur 132 ADB 5.65 5.08 0.56 0.00 0.04 0.04 0.00 0.00

Kahilipara - Rangia & Kahilipara - Kamakhya will be

Terminated at Kamakhya 132 ADB 2.82 2.54 0.28 0.00 0.00 0.00 0.00 0.00

Rerouting of Kahilipara - Sishugram at Amingaon 132 ADB 2.82 2.54 0.28 0.00 0.04 0.04 0.00 0.00

Kahilipara - Guwahati Medical College 132 NLCPR/

State plan 6.08 5.47 0.61 0.00 0.03 0.03 0.00 0.00

D/C LILO of 132kV - D/C CTPS - Kahilipara/Narengi line

Sonapur 132 ADB 11.30 10.17 1.13 0.00 0.03 0.03 0.00 0.00

Samaguri - Nagaon 132 ADB 11.30 10.17 1.13 0.00 0.04 0.04 0.00 0.00

Samaguri - Jhakalabandha 132 NLCPR/

State plan 18.50 16.65 1.85 0.00 0.04 0.03 0.00 0.00

MERCADOS EMI - NDPL



Finance

Total FY 2008-2012 Total FY 2008-2009


LILO of Jorhat - Bokakhat at Jorhat (West) 132 ADB 2.82 2.54 0.28 0.00 0.03 0.03 0.00 0.00

Sibsagar - Morgan 132 NLCPR/

State plan 21.14 19.03 2.11 0.00 0.04 0.03 0.00 0.00

LILO of Morgan - Dibrugarh at New Dibrugarh (Behiating) 132 ADB 4.23 3.81 0.42 0.00 0.03 0.03 0.00 0.00

Tinsukia - Rupai 132 ADB 19.81 17.83 1.98 0.00 0.04 0.03 0.00 0.00

Rupai - Chapakowa (with 4KM river crossing via Dhola) 132 NLCPR/

State plan 65.95 59.36 6.60 0.00 0.04 0.04 0.00 0.00

LILO of NTPS - Tinsukia at Bordubi 132 ADB 4.52 4.07 0.45 0.00 0.03 0.03 0.00 0.00

LILO of Lakowa - NTPS (one Ckt) at Sonari 132 ADB 2.82 2.54 0.28 0.00 0.03 0.03 0.00 0.00

Lanka - Lumding 132 NLCPR/

State plan 18.50 16.65 1.85 0.00 0.04 0.03 0.00 0.00

LILO of Khandong - Haflong at Umrangso 132 NLCPR/

State plan 3.04 2.74 0.30 0.00 0.03 0.03 0.00 0.00

LILO of Panchgram - Durlavchera at Hailakandi 132 ADB 2.82 2.54 0.28 0.00 0.03 0.03 0.00 0.00

Dhemaji - Silapathar 132 NLCPR/

State plan 26.43 23.79 2.64 0.00 0.04 0.03 0.00 0.00

Silapathar - Jonai 132 NLCPR/

State plan 37.00 33.30 3.70 0.00 0.04 0.03 0.00 0.00

Double Ckt LILO of Depota - Gohur at Sonabil 132 ADB 5.65 5.08 0.56 0.00 0.03 0.03 0.00 0.00

2nd Ckt Stringing of Samaguri - Lanka 132 ADB 4.23 3.81 0.42 0.00 0.00 0.00 0.00 0.00

MERCADOS EMI - NDPL



Finance

Total FY 2008-2012 Total FY 2008-2009


Azara - Boko 132 NLCPR/

State plan 5.12 4.61 0.51 0.00 0.26 0.23 0.03 0.00

Azara 220kV- Azara132kV 132 NLCPR/

State plan 4.10 3.69 0.41 0.00 0.20 0.18 0.02 0.00

Total : 132 KV Line 369.85 332.86 36.98 0.00 1.24 1.12 0.12 0.00

Total : TRANSMISSION LINE (400+220+132) 842.66 758.39 84.27 0.00 1.64 1.47 0.16 0.00

B : Sub Station

New S/S

Azara 400/220 NLCPR/

State plan 279.51 251.56 27.95 0.00 5.00 4.50 0.50 0.00

Total : 400 KV Sub Station 279.51 251.56 27.95 0.00 5.00 4.50 0.50 0.00

Rangia 220/132 ADB 54.48 49.03 5.45 0.00 0.75 0.68 0.08 0.00

Amingaon 220/132 ADB 45.26 40.74 4.53 0.00 3.50 3.15 0.35 0.00

Sonabil 220/132 ADB 54.82 49.34 5.48 0.00 1.25 1.13 0.13 0.00

Azara 220/132 ADB 20.08 18.07 2.01 0.00 1.50 1.35 0.15 0.00

Behiating (New Didrugarh) 220/132 NLCPR/

State plan 50.00 45.00 5.00 0.00 2.00 1.80 0.20 0.00


Jawaharnagar 220/33 NLCPR/

State plan 45.35 40.82 4.54 0.00 1.75 1.58 0.18 0.00

MERCADOS EMI - NDPL



Finance

Total FY 2008-2012 Total FY 2008-2009


Azara 220/33 NLCPR/

State plan 6.24 5.62 0.62 0.50 0.45 0.05 0.00

Total : 220/33 KV Sub Station 51.59 46.43 5.16 0.00 2.25 2.03 0.23 0.00

Kokrajhar 132/33 NLCPR/

State plan 34.81 31.33 3.48 0.00 3.00 2.70 0.30 0.00

Bilasipara 132/33 ADB 25.86 23.27 2.59 0.00 0.75 0.68 0.08 0.00

Matia (Dudhnoi) 132/33 ADB 23.16 20.84 2.32 0.00 0.75 0.68 0.08 0.00

Kamalpur 132/33 ADB 27.28 24.55 2.73 0.00 0.00 0.00 0.00 0.00

Kamakhya 132/33 ADB 37.42 33.68 3.74 0.00 3.50 3.15 0.35 0.00

Guwahati Medical College 132/33 NLCPR/

State plan 41.34 37.20 4.13 0.00 2.00 1.80 0.20 0.00

Sonapur 132/33 ADB 74.70 67.23 7.47 0.00 3.00 2.70 0.30 0.00

Nagoan 132/33 ADB 27.80 25.02 2.78 0.00 2.00 1.80 0.20 0.00

Jakalabandha 132/33 NLCPR/

State plan 28.56 25.71 2.86 0.00 0.75 0.68 0.08 0.00

Jorhat (West) 132/33 ADB 28.68 25.81 2.87 0.00 2.00 1.80 0.20 0.00

Behiating (New Didrugarh) 132/33 ADB 31.51 28.36 3.15 0.00 1.00 0.90 0.10 0.00

Rupai 132/33 ADB 25.36 22.83 2.54 0.00 0.75 0.68 0.08 0.00

Chapakhowa 132/33 NLCPR/

State plan 25.58 23.02 2.56 0.00 0.75 0.68 0.08 0.00

MERCADOS EMI - NDPL



Finance

Total FY 2008-2012 Total FY 2008-2009


Bordubi 132/33 ADB 30.93 27.83 3.09 0.00 1.00 0.90 0.10 0.00

Sonari 132/33 ADB 27.30 24.57 2.73 0.00 1.00 0.90 0.10 0.00

Lumding 132/33 NLCPR/

State plan 31.68 28.51 3.17 0.00 1.00 0.90 0.10 0.00

Umrangso 132/33 NLCPR/

State plan 28.02 25.22 2.80 0.00 1.00 0.90 0.10 0.00

Hailakandi 132/33 ADB 24.22 21.80 2.42 0.00 1.00 0.90 0.10 0.00

Silapathar 132/33 NLCPR/

State plan 26.76 24.08 2.68 0.00 0.75 0.68 0.08 0.00

Jonai 132/33 NLCPR/

State plan 25.58 23.02 2.56 0.00 0.50 0.45 0.05 0.00


Total : SUB STATION 1182.28 1064.05 118.23 0.00 42.75 38.48 4.28 0.00

Substation Augmentation and Transformer

Replacement

Samaguri 220/132 NLCPR/

State plan 26.79 24.11 2.68 0.00 0.00 0.00 0.00 0.00

Tinsukia 220/132 ADB 11.71 10.54 1.17 0.00 0.00 0.00 0.00 0.00

Total :220/132 KV 38.50 34.65 3.85 0.00 0.00 0.00 0.00 0.00

Kahilipara 132/33 ADB 14.80 13.32 1.48 0.00 0.00 0.00 0.00 0.00

MERCADOS EMI - NDPL



Finance

Total FY 2008-2012 Total FY 2008-2009


Jagi Road (Baghjap) 132/33 ADB 8.46 7.61 0.85 0.00 0.00 0.00 0.00 0.00

Lanka 132/33 ADB 8.49 7.64 0.85 0.00 0.00 0.00 0.00 0.00

Mariani 132/33 ADB 12.12 10.91 1.21 0.00 0.00 0.00 0.00 0.00

Margheria (Ledo) 132/33 ADB 8.86 7.98 0.89 0.00 0.00 0.00 0.00 0.00

Tinsukia 132/33 ADB 22.43 20.19 2.24 0.00 0.00 0.00 0.00 0.00

North Lakhimpur 132/33 ADB 8.97 8.07 0.90 0.00 0.00 0.00 0.00 0.00

Gohpur 132/33 ADB 8.97 8.07 0.90 0.00 0.00 0.00 0.00 0.00

Total : 132/33 KV 93.09 83.78 9.31 0.00 0.00 0.00 0.00 0.00

Total : SUB STATION AUGMENTATION 131.59 118.44 13.16 0.00 0.00 0.00 0.00 0.00

Total : SUB STATION + SUB STATION

AUGUMENTATION 1313.87 1182.48 131.39 0.00 42.75 38.48 4.28 0.00

Terminal Bays

BTPS- Rangia at Salekati 220 ADB 4.45 4.01 0.45 0.00 0.00 0.00 0.00 0.00

Namrup-Mariani at Mariani 220 ADB 4.46 4.02 0.45 0.00 0.00 0.00 0.00 0.00

Total : 220 KV Terminal Bays 18.14 16.33 1.81 0.00 0.00 0.00 0.00 0.00

132 KV Terminal Bays

Samaguri - Nagaon at Samaguri 132 ADB 2.77 2.49 0.28 0.00 0.00 0.00 0.00 0.00

MERCADOS EMI - NDPL



Finance

Total FY 2008-2012 Total FY 2008-2009


Samaguri - Jakhalabandha at Samaguri 132 NLCPR/

State plan 1.75 1.58 0.18 0.00 0.00 0.00 0.00 0.00

Samaguri - Lanka at Samaguri 132 ADB 1.38 1.24 0.14 0.00 0.00 0.00 0.00 0.00

Samaguri - Lanka at Lanka 132 NLCPR/

State plan 1.75 1.58 0.18 0.00 0.00 0.00 0.00 0.00

Lanka - Lumding at Lanka 132 NLCPR/

State plan 1.75 1.58 0.18 0.00 0.00 0.00 0.00 0.00

Tinsukia - Rupai at Tinsukia 132 ADB 1.59 1.43 0.16 0.00 0.00 0.00 0.00 0.00

Kokrajhar - Bilasipara at Kokrajhar 132 ADB 2.95 2.65 0.29 0.00 0.00 0.00 0.00 0.00

Bilasipara - Gauripur at Gauripur 132 ADB 1.59 1.43 0.16 0.00 0.00 0.00 0.00 0.00

Agia - Matia at Agia 132 ADB 1.59 1.43 0.16 0.00 0.00 0.00 0.00 0.00

Sibsagar - Moran at Sibsagar 132 NLCPR/

State plan 1.75 1.58 0.18 0.00 0.00 0.00 0.00 0.00

Sibsagar - Moran at Moran 132 NLCPR/

State plan 1.75 1.58 0.18 0.00 0.00 0.00 0.00 0.00

Dhemaji - Silapathar at Dhemaji 132 NLCPR/

State plan 1.75 1.58 0.18 0.00 0.00 0.00 0.00 0.00

Silapathar - Jonai at Silapathar 132 NLCPR/

State plan 1.75 1.58 0.18 0.00 0.00 0.00 0.00 0.00

Rupai - Chapakhowa at Rupai 132 NLCPR/

State plan 1.75 1.58 0.18 0.00 0.00 0.00 0.00 0.00

MERCADOS EMI - NDPL



Finance

Total FY 2008-2012 Total FY 2008-2009


Kahilipara-GMC at kahilipara 132 NLCPR/

State plan 3.26 2.93 0.33 0.00 0.00 0.00 0.00 0.00

BTPS- Kokrajhar at Salekati 132 NLCPR/

State plan 3.26 2.93 0.33 0.00 0.00 0.00 0.00 0.00

Total : 132 KV Terminal Bays 32.38 29.14 3.24 0.00 0.00 0.00 0.00 0.00

TOTAL : TERMINAL BAYS 50.52 45.47 5.05 0.00 0.00 0.00 0.00 0.00

Reactive Compensation (Bus Capacitor or Capacitor

Banks)

Pailapool S/S 33 ADB 1.43 1.29 0.14 0.00 0.00 0.00 0.00 0.00

Gohpur S/S 33 ADB 1.43 1.29 0.14 0.00 0.00 0.00 0.00 0.00

Garmur S/S 33 ADB 1.69 1.52 0.17 0.00 0.00 0.00 0.00 0.00

Sishugram S/S 33 ADB 1.69 1.52 0.17 0.00 0.00 0.00 0.00 0.00

Nazira 33 ADB 1.43 1.29 0.14 0.00 0.00 0.00 0.00 0.00

Panchgram 33 ADB 1.43 1.29 0.14 0.00 0.00 0.00 0.00 0.00

Kahilipara 33 ADB 1.69 1.52 0.17 0.00 0.00 0.00 0.00 0.00

CTPS 33 ADB 1.43 1.29 0.14 0.00 0.00 0.00 0.00 0.00

Barnagar 33 ADB 1.69 1.52 0.17 0.00 0.00 0.00 0.00 0.00

Dhemaji 33 NLCPR/

State plan 1.43 1.29 0.14 0.00 0.00 0.00 0.00 0.00

MERCADOS EMI - NDPL



Finance

Total FY 2008-2012 Total FY 2008-2009


Golaghat 33 NLCPR/

State plan 1.69 1.52 0.17 0.00 0.00 0.00 0.00 0.00

Bokajan 33 NLCPR/

State plan 1.43 1.29 0.14 0.00 0.00 0.00 0.00 0.00

TOTAL : Reactive Compensation (Bus Capacitor or

Capacitor Banks) 18.45 16.60 1.84 0.00 0.00 0.00 0.00 0.00

Refurbishment of Existing Sub-Stations

Replacement of obsolete equipments like 220 kV SF6 CB - 12

nos., 220 kV Isolators - 6 nos., 220 kV CT - 6 nos. 220 ADB 6.46 5.81 0.65 0.00 0.00 0.00 0.00 0.00


nos., 132 kV Isolator - 26 nos., 132 kV CT - 69 nos., 132 kV

PT - 9 nos., 132/33 kV Transformer Panel - 2 nos., 132 kV

Feeder Panel - 15 nos., 132 kV Bus Coupler Panel - 8 nos.

132 ADB 27.68 24.91 2.77 0.00 0.00 0.00 0.00 0.00


nos., 33 kV CT - 42 nos. 33 ADB 6.81 6.13 0.68 0.00 0.00 0.00 0.00 0.00

TOTAL : REFURBISHMENT 40.95 36.85 4.09 0.00 0.00 0.00 0.00 0.00

PLCC Line Equipments

220 kV D/C Salakathi (BTPS)-Rangia 220 ADB 0.96 0.86 0.10 0.00 0.00 0.00 0.00 0.00

220 kV D/C Rangia - Amingaon (New) 220 ADB 0.96 0.86 0.10 0.00 0.00 0.00 0.00 0.00

220 kV D/C LILO of Samaguri - Sarusajai Line at Sonapur 220 ADB 1.91 1.72 0.19 0.00 0.00 0.00 0.00 0.00

220 kV D/C Mariani - Namrup Line at Namrup 220 ADB 0.96 0.86 0.10 0.00 0.00 0.00 0.00 0.00

MERCADOS EMI - NDPL



Finance

Total FY 2008-2012 Total FY 2008-2009


220 kV D/C LILO of Samaguri - Balipara (PG) Line at Sonabil 220 ADB 1.91 1.72 0.19 0.00 0.00 0.00 0.00 0.00

220 kV D/C Tinsukia-Behiating at Tinsukia 220 NLCPR/

State plan 1.06 0.95 0.11 0.00 0.00 0.00 0.00 0.00

220 kV D/C Tinsukia-Behiating at Behiating 220 NLCPR/

State plan 1.06 0.95 0.11 0.00 0.00 0.00 0.00 0.00

220 kV LILO of Sonapur-Sarusajai at Jawaharnagar 220 NLCPR/

State plan 2.11 1.90 0.21 0.00 0.00 0.00 0.00 0.00

Total PLCC Line Equipments for 220 kV 10.93 9.83 1.09 0.00 0.00 0.00 0.00 0.00

132 kV D/C LILO of Depota - Gohpur Line at Sonabil 132 ADB 3.84 3.46 0.38 0.00 0.00 0.00 0.00 0.00

132 kV S/C Tinsukia - Rupai Line on D/C Towers 132 ADB 0.67 0.60 0.07 0.00 0.00 0.00 0.00 0.00

132 kV S/C Bilasipara - Gauripur Line 132 ADB 0.67 0.60 0.07 0.00 0.00 0.00 0.00 0.00

132 kV D/C Kokrajhar -Bilasipara Line 132 ADB 0.67 0.60 0.07 0.00 0.00 0.00 0.00 0.00

132 kV D/C LILO of Kahilipara - Rangia/Sishugram Line at

Kamakhya 132 ADB 1.34 1.20 0.13 0.00 0.00 0.00 0.00 0.00

132 kV S/C LILO of Dibrugarh - Moran Line at Bihiating 132 ADB 2.56 2.31 0.26 0.00 0.00 0.00 0.00 0.00

132 kV S/C Agia -Matia Line (on D/C Towers) 132 ADB 0.67 0.60 0.07 0.00 0.00 0.00 0.00 0.00

132 kV D/C LILO of Chandrapur - Kahilipara Line at Sonapur 132 ADB 2.00 1.80 0.20 0.00 0.00 0.00 0.00 0.00

132 kV S/C Samaguri - Nagaon Line (on D/C Towers) 132 ADB 0.67 0.60 0.07 0.00 0.00 0.00 0.00 0.00

132 kV S/C LILO of Jorhat - Bokakhat Line at Jorhat (West) 132 ADB 1.34 1.20 0.13 0.00 0.00 0.00 0.00 0.00

MERCADOS EMI - NDPL



Finance

Total FY 2008-2012 Total FY 2008-2009


132 kV S/C LILO of Lakwa - Namrup Line at Sonari 132 ADB 1.34 1.20 0.13 0.00 0.00 0.00 0.00 0.00

132 kV S/C LILO of Namrup - Tinsukia Line at Bordubi 132 ADB 2.56 2.31 0.26 0.00 0.00 0.00 0.00 0.00

132 kV D/C LILO of Rangia - Kahilipara/Sishugram Line at

Kamalpur 132 ADB 3.84 3.46 0.38 0.00 0.00 0.00 0.00 0.00

132 kV S/C LILO of Panchgram - Dullavcherra Line at

Hailakandi 132 ADB 2.56 2.31 0.26 0.00 0.00 0.00 0.00 0.00

132kV D/C BTPS-Kokrajhar line at BTPS 132 NLCPR/

State plan 1.47 1.33 0.15 0.00 0.00 0.00 0.00 0.00

132kV D/C Kahilipara-GMC line at Kahilipara 132 NLCPR/

State plan 1.47 1.33 0.15 0.00 0.00 0.00 0.00 0.00

132kv S/C Samaguri-Jakhalabandha 132 NLCPR/

State plan 0.74 0.66 0.07 0.00 0.00 0.00 0.00 0.00

132kV S/C Rupai-Chapakhowa at Rupai 132 NLCPR/

State plan 0.74 0.66 0.07 0.00 0.00 0.00 0.00 0.00

132kV S/C Lanka - Lumding at Lanka 132 NLCPR/

State plan 0.74 0.66 0.07 0.00 0.00 0.00 0.00 0.00

132kV S/C Dhemaji - Silapathar at Dhemaji 132 NLCPR/

State plan 0.74 0.66 0.07 0.00 0.00 0.00 0.00 0.00

132kV S/C Silapathar - Jonai at Silapathar 132 NLCPR/

State plan 0.74 0.66 0.07 0.00 0.00 0.00 0.00 0.00

Total PLCC Line Equipments for 132 kV 31.36 28.22 3.14 0.00 0.00 0.00 0.00 0.00

Total PLCC Line Equipments for 220 & 132 kV 42.28 38.05 4.23 0.00 0.00 0.00 0.00 0.00

MERCADOS EMI - NDPL



Finance

Total FY 2008-2012 Total FY 2008-2009


PLCC Station Equipment

Rangia, 220/132 ADB 0.11 0.10 0.01 0.00 0.00 0.00 0.00 0.00

Amingaon, 220/132 ADB 0.11 0.10 0.01 0.00 0.00 0.00 0.00 0.00

Sonabil, 220/132 ADB 0.11 0.10 0.01 0.00 0.00 0.00 0.00 0.00

Behiating, 220/132 ADB 0.13 0.11 0.01 0.00 0.00 0.00 0.00 0.00

Sonapur 220/132 ADB 0.06 0.05 0.01 0.00 0.00 0.00 0.00 0.00

Total PLCC Station Equipments for 220/132 kV 0.52 0.47 0.05 0.00 0.00 0.00 0.00 0.00

Sonapur 220/132/33 ADB

Jawaharnagar, 220/33 NLCPR/

State plan 0.13 0.11 0.01 0.00 0.00 0.00 0.00 0.00

Total PLCC Station Equipments for 220/33 kV 0.13 0.11 0.01 0.00 0.00 0.00 0.00 0.00

Sonapur 132/33 ADB 0.06 0.05 0.01 0.00 0.00 0.00 0.00 0.00

Kamakhya, 132/33 132/33 ADB 0.10 0.09 0.01 0.00 0.00 0.00 0.00 0.00

Kamalpur, 132/33 132/33 ADB 0.10 0.09 0.01 0.00 0.00 0.00 0.00 0.00

Hailakandi, 132/33 132/33 ADB 0.10 0.09 0.01 0.00 0.00 0.00 0.00 0.00

Nagaon, 132/33 132/33 ADB 0.10 0.09 0.01 0.00 0.00 0.00 0.00 0.00

MERCADOS EMI - NDPL



Finance

Total FY 2008-2012 Total FY 2008-2009


Jorhat(West), 132/33 132/33 ADB 0.10 0.09 0.01 0.00 0.00 0.00 0.00 0.00

Sonari, 132/33 132/33 ADB 0.10 0.09 0.01 0.00 0.00 0.00 0.00 0.00

Bordubi, 132/33 132/33 ADB 0.10 0.09 0.01 0.00 0.00 0.00 0.00 0.00

Bilasipara, 132/33 132/33 ADB 0.10 0.09 0.01 0.00 0.00 0.00 0.00 0.00

Rupai, 132/33 132/33 ADB 0.10 0.09 0.01 0.00 0.00 0.00 0.00 0.00

Matia, 132/33 132/33 ADB 0.10 0.09 0.01 0.00 0.00 0.00 0.00 0.00

Kokrajhar, 132/33 132/33 NLCPR/

State plan 0.11 0.10 0.01 0.00 0.00 0.00 0.00 0.00

Guwahati Medical College, 132/33 132/33 NLCPR/

State plan 0.11 0.10 0.01 0.00 0.00 0.00 0.00 0.00

Jakhalabandha, 132/33 132/33 NLCPR/

State plan 0.11 0.10 0.01 0.00 0.00 0.00 0.00 0.00

Chapakhowa, 132/33 132/33 NLCPR/

State plan 0.11 0.10 0.01 0.00 0.00 0.00 0.00 0.00

Lumding, 132/33 132/33 NLCPR/

State plan 0.11 0.10 0.01 0.00 0.00 0.00 0.00 0.00

Umrangshu, 132/33 132/33 NLCPR/

State plan 0.11 0.10 0.01 0.00 0.00 0.00 0.00 0.00

Silapathar, 132/33 132/33 NLCPR/

State plan 0.11 0.10 0.01 0.00 0.00 0.00 0.00 0.00

MERCADOS EMI - NDPL



Finance

Total FY 2008-2012 Total FY 2008-2009


Jonai, 132/33 132/33 NLCPR/

State plan 0.11 0.10 0.01 0.00 0.00 0.00 0.00 0.00

Total PLCC Station Equipment for132/33 kV 1.89 1.70 0.19 0.00 0.00 0.00 0.00 0.00

Total PLCC Station Equipment for 220/132, 220/33 &

132/33 kV 2.54 2.29 0.25 0.00 0.00 0.00 0.00 0.00

Fibre Optics

Fiber Optices on 220 kV Mariani-Samaguri-Sarusajai ADB

8.70 7.83 0.87 0.00 0.00 0.00 0.00 0.00 132 kV Sarusajai-Kahilipara-Amingaon-Rangia line, 315 km

@ 2.761 lakh/km. ADB

Fiber Optices on station equipment at the following

sub-stations: ADB 3.04 2.73 0.30 0.00 0.00 0.00 0.00 0.00

Sarusajai 220/132/33

Samaguri 220/32

Amingaon 220/32

Rangia 220/32

Kahilipara 132/33

Mariani 132/33

Fiber Optics on 220 kV Sarusajai-Azara-Boko-Agia-BTPS and

BTPS-Rangia line, 340 km @ 2.761 lakh/km.

NLCPR/

State plan 10.37 9.33 1.04 0.00 0.00 0.00 0.00 0.00

MERCADOS EMI - NDPL



Finance

Total FY 2008-2012 Total FY 2008-2009


Fiber Optices on station equipments at sub-stations NLCPR/

State plan 2.24 2.01 0.22 0.00 0.00 0.00 0.00 0.00

Azara 220/132

Boko 220/132/33

Agia 220/132/33

BTPS 220/132/33

Total Fibre Optics 24.34 21.91 2.43 0.00 0.00 0.00 0.00 0.00

SCADA

RTUs for 15 new sub-stations @ Rs. 5.25 lakhs ADB 0.79 0.71 0.08 0.00 0.00 0.00 0.00 0.00

Sonabil 220/132

Behiating 220/132

Sonapur 132/33

Kamakhya 132/33

Bordubi 132/33

Kamalpur 132/33

Nagaon 132/33

MERCADOS EMI - NDPL



Finance

Total FY 2008-2012 Total FY 2008-2009


Jorhat(West) 132/33

Matai 132/33

Sonari 132/33

Hailakandi 132/33

Bilasipara 132/33

Rupai 132/33

RTUs for 9 new sub-stations @ Rs. 5.25 lakhs NLCPR/

State plan 0.52 0.47 0.05 0.00 0.00 0.00 0.00 0.00

Jawaharnagar 220/33

Kokrajhar 132/33

Guwahati Medical College 132/33

Linding 132/33

Lumding 132/33

Jakhalabandha 132/33

Chapakowa 132/33

Silapathar 132/33

MERCADOS EMI - NDPL



Finance

Total FY 2008-2012 Total FY 2008-2009


Jonai 132/33

Umrangshu 132/33

TOTAL : SCADA 1.31 1.18 0.13 0.00 0.00 0.00 0.00 0.00

Refurbishment of Existing Substations

Replacement of obsolete equipments like: ADB

220 kV SF6 CB - 12 nos.

132 kV SF6 CB - 61 nos.

33 kV SF6 CB - 61 nos

220 kV Isolators - 6 nos.

132 kV CT - 69 nos.

33 kB CT - 42 nos.

132 kV PT - 9 nos

132/33 kV Transformer Panel - 2 nos.

132 kV Feeder Panel - 15 nos.

Structure Steel - 20 MT

Total : REFURBISHMENT

MERCADOS EMI - NDPL



Finance

Total FY 2008-2012 Total FY 2008-2009


GRAND TOTAL 2336.92 2103.22 233.69 0.00 44.39 39.95 4.44 0.00

MERCADOS EMI - NDPL


1. BRIEFING ON CAPITAL INVESTMENT &

BUSINESS/FINANCIAL PLANNING

1.1. WORKSHOP ATTENDANTS

Sl.

No Name Designation Contact No. E-mail ID

1 Utpala Sharma CGM (PPD), APDCL +91

9954097071

[email protected]

2 Deba Priya Das CGM (CAZ), APDCL +91

9435047391

3 F Karim DGM (PMU), ASEB +91

9435107231

[email protected]

4 Bharat Kaman AGM (PP & D), ASEB +91

9435112895

5 Antara Baruah AGM (PMU), ASEB +91

9864024281

[email protected]

6 Jiten Borthakur AGM (PP & D), ASEB +91

9435360433

7 Surajit Baruah AGM, APDCL +91

9706241436

[email protected]

8 Akhil Ch. Debnath AGM (F & A), APDCL +91

9435148806

9 Tazuddin Ali AGM (F & A), AEGCL +91

9435332220

10 Kashi Nath Baishya A.O. +91

9864512107

[email protected]

11 A. K. S. Zaman A.O. +91

9864076123

[email protected]

12 Amit Kar AGM (F & A), APGCL

13 J. K. Saud AGM (Tech), APGCL +91

943511167

[email protected]

14 R. L. Baruah GM (HQ), AEGCL +91

9435198395

[email protected]

15 B. Paul CGM, AEGCL & PMU,

Director

+91

9435018574

[email protected]

16 Manoj Adhikary DGM (Commercial) +91

9864049287

[email protected]

17 N. C. Das GM, APGCL +91

9435559447

[email protected]

18 K. Phatowali CGM, APGCL +91

9435004318

[email protected]

MERCADOS EMI - NDPL


Sl.

No Name Designation Contact No. E-mail ID

19 S. K. Saha CGM (F & A), APGCL,

AEGCL

+91

9435048640

[email protected]

1.2. PRESENTATION

AF-Mercados EMI

BRIEFING ON CAPITAL INVESTMENT & BUSINESS/FINANCIAL PLANNING

byEdna Espos

(International Finance Expert)

TA NO. 7378-IND Capacity Development of AssamPower Sector Utilities

Guwahati, 09 May 2011

MERCADOS EMI - NDPL


AF-Mercados EMI

TOPICS

1. Overview on Transmission Development Planning

2. Overview on Generation Expansion Analysis

3. Business & Financial Planning

MERCADOS EMI - NDPL


AF-Mercados EMI

OVERVIEW ON TRANSMISSION

DEVELOPMENT PLANNING

AF-Mercados EMI

Bulk Transmission Objectives

! Power delivery

! Economy Interchange between Systems

! Provides a means of sharing generation reserves among systems

! Improved system performance and security

! Increase fuel source diversity

MERCADOS EMI - NDPL


AF-Mercados EMI

! Load Changes (capacity)

! Generation Changes

! Reliability/Power Quality (frequency variation, voltage variation,

harmonics, voltage imbalance, voltage fluctuation and flicker severity,

transient voltage variation) /Safety (electrical code, occupational safety

& health) /Security (transient stability)

! Economics

! Environmental Considerations

! Construction Time Requirements

Transmission Planning Considerations

AF-Mercados EMI

(Cont.)

! Equipment Availability

! Planning Flexibility

! Operating Flexibility

! Technological Advances

! Coordination with Neighboring Systems

Transmission Planning Considerations

MERCADOS EMI - NDPL


AF-Mercados EMI

! Load Analysis and Forecasting

! Data Collection and System Model Development

! Performance Analysis of Existing System with Forecasted Loads

! Conceptual and Detailed Feasibility Studies of Alternate Designs

! Evaluation of Alternatives

! Selection of Plan to be Used

Transmission Planning Process

AF-Mercados EMI

Stages in Transmission Planning

I. Accumulate and Analyze Latest System Data

II. Establish Planning Criteria

III. Define Transmission Options

IV. Evaluate Options

V. Recommend and Report


MERCADOS EMI - NDPL


AF-Mercados EMI


I. Accumulate and Analyze Latest System Data

A. Load forecasts & characteristics

B. Existing & committed Generation & Transmission Data

C. Latest generation plan

D. Available transmission options & constraints

E. Develop line & substation costs

F. Identify existing system problems


AF-Mercados EMI


II. Establish Planning Criteria

A. Line & equipment outages

B. Voltage ranges

C. Stability criteria

D. Design criteria

E. Economic parameters

F. Environmental considerations


MERCADOS EMI - NDPL


AF-Mercados EMI


III. Define Transmission Options

A. Voltage levels

B. Transmission Right-of-Ways & substation locations

C. Multiple single-circuit vs. double circuit


AF-Mercados EMI


IV. Evaluate Options

A. Analytical testing

- Load flows

- Stability

- Short Circuit

B. Economic analysis

- Cash flows

- Present worth

- Sensitivity


MERCADOS EMI - NDPL


AF-Mercados EMI


V. Recommend and Report

A. Reinforcement and Expansion Plan

B. Interconnection Plan

C. Financial Requirements/Investment Plan


AF-Mercados EMI

! Short Circuit Studies

! Load Flow Studies

! Stability Studies

! Loss Studies

! Reactive Power and Voltage Control Studies

! Interconnection Studies

! Intersystem Reliability Studies

Analytical Studies

MERCADOS EMI - NDPL


AF-Mercados EMI

! Discount rate

! Inflation

! Equipment life

! Fixed charges

• ROI

• Depreciation

• Taxes

• Insurance

! O & M expenses

! Sales/Loss evaluation

Planning Criteria - Economics

AF-Mercados EMI

! Routing

! Design

! Construction

! Operation

! Corona-related effects

Planning Criteria - Environmental

MERCADOS EMI - NDPL


AF-Mercados EMI

! STEADY STATE

! Thermal overload

! Low voltages

! High voltages

! DYNAMIC

! Transient instability

! Subsynchronous resonance (SSR)

! Loop flow

Transmission System Problems

AF-Mercados EMI

! Uneconomic dispatch

! Reactive support

! Reconfiguring existing network

! New generation

! Reconductoring

! New line

! Load dropping


Some Solutions

MERCADOS EMI - NDPL


AF-Mercados EMI

! CAUSES

! High reactive load at the user end

! Long distance transmission of power

! Heavily loaded lines

! SOLUTIONS

! Add reactive power

! Install new lines

! Use uneconomic dispatch


AF-Mercados EMI

! CAUSES

! Lightly loaded lines

! Oversupply/

underconsumption of reactive power

! SOLUTIONS

! Absorb reactive power

! Disconnect lines

! Use uneconomic dispatch


MERCADOS EMI - NDPL


AF-Mercados EMI

SOLUTION

! PREVENTION

! Set operating limits

! CONTINOUS ACTION SCHEMES

! Fast response reactive supply

! REMEDIAL ACTION SCHEMES

! Switch-in series capacitors

! Rebalance generation & load

! Controlled isolating schemes


Transient

Stability

AF-Mercados EMI

SOLUTION

POWER FLOW CONTROL

! Install phase shifters

! Open the loop

! Install DC lines

! ADMINISTRATIVE

! Monetary compensation

! Schedule curtailment


MERCADOS EMI - NDPL


AF-Mercados EMI

Capital Investment Plan

! Follows analytical studies

! Choice of projects based on results of economic

evaluation of alternative options (see methodology in

February workshop)

! Summary of Capital Projects for Next 10 Years (see

Excel template)

AF-Mercados EMI

Overview on GenerationExpansion Planning Analysis

MERCADOS EMI - NDPL


AF-Mercados EMI

Power System Models and Methodology

! Load Modelling

! Generation Outage Probability Modelling

! Probabilistic Reliability Evaluation

! Optimal Capacity Mix Evaluation

! Optimal Production Simulation

! Generation Cost Calculation

AF-Mercados EMI

Optimal Capacity Mix Evaluation and Generation Cost Calculation

With Screening Curve

! Preliminary screening of planning alternatives (e.g., generation

technology).

! Total cost during operating life of the plants are discounted and

plotted against capacity factor values

! Annuity of power plant investment , annual fixed and variable O&M,

annual production costs are added and divided by the annual

generation of each power plant

EXCEL SHEETS ON POWER PLANT DATA, SCREENING CURVES

AND LOAD CATEGORY

MERCADOS EMI - NDPL


AF-Mercados EMI

Capital Investment Plan

! For economic evaluation of other generation

investment projects (see excel worksheets from

February workshop)

! Summary of Capital Projects including expansion

(see excel worksheet)

AF-Mercados EMI

Business & Financial Planning

MERCADOS EMI - NDPL


AF-Mercados EMI

Business Plans & Financial Plans

BUSINESS PLAN

! Business goals / objectives for the plan period

! Plans/strategies for reaching these goals and objectives

FINANCIAL PLAN

! Finances & results of operations for the plan period

! Planning tool in the beginning of period; control device to measure performance against plan at end of period

PLAN PERIOD FOR THIS PROJECT = 10 YEARS (2012-2023)

AF-Mercados EMI

Business Plan ne

✶� ❋✁✂✄☎ groups

✷✆ ❖✝✞✟✠tives for each focus group

3. Performance ■✡☛☞✠✌✍✎✏ and target for each ✎✝✞✟✠tive

4. ❇usiness Strategies – action plans to achieve the

targets

MERCADOS EMI - NDPL


AF-Mercados EMI

Business Plan

Focus Groups From APGCL Business Plan

1. Customer & Community Satisfaction

2. Financial Performance

3. Business Processes

4. Staff & Company Culture

AF-Mercados EMI

Business Plan: Sample Objectives, Performance Indicators and Targets

Customer & Community Satisfaction

UTILITY OBJECTIVE* PERFORMANCE

INDICATOR

ANNUAL TARGET

(2012-2023)

APGCL Reliable Electricity

Supply

No . Of Plant Trips Indicate target

performance per

year

APDCL (1) -same-

(2) Improve

service quality

(1)SAIFI,

SAIDI,MAIPI

(2) Response time

to service

interruption

AEGCL -same SAIFI,SAIDI

MAIPI

See identified gaps in Interim Report 2

MERCADOS EMI - NDPL


AF-Mercados EMI


FINANCIAL P ERFORMANCE


INDICATOR

ANNUAL TARGET

APGCL Increase revenue

base

MU Generated

APDCL Improve Debt

Service Coverage

Ratio

Debt Service Ratio

AEGCL Manage

Controllable Costs

Inventory Cost

*See identified Gaps in Interim Report 2

AF-Mercados EMI


BUSINESS PROCESSES


INDICATOR

ANNUAL TARGET

(2012-2023)

APGCL Expand & diversify

generation

capacity

-MW Capacity

-Generation mix

APDCL Minimize system

loss

-% technical loss

-% commercial

loss

AEGCL Minimize system

loss

-% technical loss

-% commercial

loss

See identified Gaps in Interim Report 2

MERCADOS EMI - NDPL


AF-Mercados EMI

Business Plan: Sample Objectives, Performance Indicators and Annual Targets

STAFF & COMPANY CULTURE

UTILITY OBJECTIVES* PERFORMANCE

INDICATOR

ANNUAL TARGET

(2012-2023)

APGCL Align pay scale

with industry

standard

% of pay to

industry standard

APDCL Align technical and

non-technical staff

complement with

industry standard

Ratio of staff to

connection

AEGCL Align pay scale

with industry

standard

% of pay to

industry standards

*See identified gaps in Interim Report 2

AF-Mercados EMI

Business Strategies

! Action plans to achieve objectives

! Refer to Proposed Action plans in Interim Report 2

Examples:

1) Business Process (APGCL) – Inventory Control and MIS; retire

old set of thermal units

2) Financial Management – hiring of full time Director of Finance

(all utilities) ; acquisition of billing software with receivable

aging, immediate disconnection and temporary connection

billings (APDCL)

3) Human Resources – Develop and establish a Human

Resources Steering Committee; enhance performance

appraisal system

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AF-Mercados EMI

Financial Plan

Required Plans and Forecasts and Assumptions for Next 10 Years

A. Revenue

! Sales Forecast in MWH/MW. Forecast based on low, medium and high growth scenarios

! Rate/Tariff Forecast per MWH/KWH/MW/KWper customer class/category per type of service (e.g. energy/capacity; distribution, supply and metering; ancillary service; system operation; transmission). Assume years when tariffs will be adjusted based on past approvals of AERC . Forecast based on 100%, 75% approvals by AERC (or other estimated based on past experience) of tariff proposal

! Forecast of Other Income. Forecast base on low, medium and high scenarios.

! Total Revenue = (Sales Forecast x Rate/Tariff) + Other Income

AF-Mercados EMI

Financial Plan

Required Plans and Forecasts and Assumptions for Next 10 Years

B. Expenditure

! Capital Investment – project/outlay per year/funding (from revenue or debt and annual revenue allocation or debt service);

! Fuel/Power cost – based on power supply agreements/fuel supply agreements and/or international forecasts of fuel prices

! Operating & Maintenance – of system/plants net of direct employee cost. Can be based on comparators (other utilities in Assam/India) or as per cent of total assets

! Employee Cost – direct employee cost. Consider plans for additional hiring; retirements, direct benefits other than salaries, etc

! General Administration – also include pension and benefits, taxes, etc.

! Working Capital

! Interest & Finance Charges – include amortization of existing and planned debts

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AF-Mercados EMI

Financial Plan Template

Item Fiscal Years Ending _(2012-2023)

Utility Fund Beginning Balance In RS and US$

Rate Adjustment In % per type of service/customer class; indicate year expected

Revenues (Utility service/Other Income) In RS and US$

Expenditures

Power Supply In RS and US$ from load forecast

Operating & Maintenance In RS and US$ from estimates or base on ratios of comparator companies

Payroll -same-

General Administration -same-

Depreciation In RS and US$ from ASSET REGISTRY

Interest & Finance Charges In RS and US$ from existing and forecast financial plan

Other Expenses Include CAPEX funding from revenue

Increase (Decrease) in Funds In RS and US$

Fund Ending Balance In RS and US$

AF-Mercados EMI

END OF PRESENTATION

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2. 10 YEAR AEGCL BUSINESS PLAN

ASSAM ELECTRICITY GRID CORPORATION LIMITED

Business Plan

FY 2010-11 to 2016-17

Draft

28 September 2011

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2.1. INTRODUCTION

2.1.1. THE BUSINESS PLAN

This business plan sets the direction for the Assam Electricity Grid Corporation, Ltd (AEGCL) for the

next five years. The company’s decisions and actions during the plan period will be focused on and

consistent with the objectives, strategies and action plans identified herein. The Performance

Indicators and performance targets shall be employed to monitor the company’s progress towards the

achievement of the planned results; to alert the company to the need to re-assess and/or strengthen

action plans; as well as to assess the performance of the respective groups and individuals

responsible for the attainment of the plan objectives and targets.

2.1.2. AEGCL

AEGCL is the state transmission utility of the state of Assam. It was established in October 2003 with

the unbundling of the Assam State Electricity Board (ASEB) into generation, distribution and

transmission companies under the government’s electricity reform and re-structuring program. The

company transmits electricity to the Assam distribution network as well as help other states in the

NE-region to evacuate their share of power from Central Sectors at different points of its network.

The AEGCL is headed by a Managing Director (MD). In addition to the MD, its management team

consists of the Chief General Manager (T&T), Chief General Manager (SLDC), Chief General Manager

(F&A), General Manager (Upper Assam T&T Zone), General Manager (Lower Assam T&T Zone), Dy.

General Manager (Upper Assam T&T Circle), Dy. General Manager (Lower Assam T&T circle), Dy.

General Manager (Tezpur T&T Circle), Dy. General Manager (Silchar T&T Circle), Dy. General Manager

(LDC) .

2.1.3. SYSTEM DEMAND

Pending the publication of the draft 18th Electric Power Survey (EPS) by Central Electricity Authority,

AEGCL conducted a load flow study which showed that demand will reach 2253 MW by 2017, or by

the end of the plan period. Anticipated power availability on March 2017 in AEGCL’s grid network;

from Assam Power Generation Company Ltd. (APGCL) and from central sector shares will be around

2053.70 MW. Assam’s share of power from the power generation potential of the NE-Region in near

future of around 1050.20 MW is included in the 2053.70 MW assessed power availability. At present,

power availability from APGCL and central sector is around 1003.50 MW. The existing grid network

can handle up to a maximum of 1060 MW. Including the 25% additional power handling capacity for

system stability, the total power transmission capacity of the grid network is required to be about

2567.00MW by 2017. Thus, AEGCL’s grid system will have to be upgraded to handle an additional

energy of 1507 MW through a number of capital investment projects listed in this Plan.!!

!

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2.2. THE BUSINESS PLAN

This Business Plan is designed to achieve AEGCL’s long-term VISION:

To be a financially- profitable company

providing high quality, reliable, safe and secure electricity transmission service

that supports the economic development of Assam

To achieve our Vision, we will:

Develop our infrastructure

Adopt and implement best practices in the industry

Inspire and empower our employees to deliver excellent service

Be a responsible member of the Assam community

2.2.1. FOCUS AREAS

This Business Plan contains key objectives, in each of four key focus are as below that, if achieved,

will enable AEGCL to achieve its Vision.:

a) Customer & Community Satisfaction

b) Financial Performance

c) Business Processes

d) Staff & Company Culture

The objectives have corresponding goals that are time-bound, measurable and realistic. These goals

are expressed in the form of performance indicators and targets for each of the strategies and action

plans that are have been identified to achieve these objectives.

a) CUSTOMER & COMMUNITY SATISFACTION

Objectives:

(1) To provide adequate transmission capacity and service that are at par with industry standards

and;

(2) Build harmonious, inter-active and participatory relationship with the community especially those

that are most impacted by the company’s projects.

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!

STRATEGIES ACTION PLANS ACTION DETAILS

• Provide adequate

transmission capacity for current unserved needs and

projected transmission demand in the plan period.

Expand transmission capacity by 1507 MW by the

end of the plan period

Please refer to Attachment for AEGCL’s capital investment plan

• Deliver reliable, safe and secure transmission

Minimize frequency and duration of interruptions of power supply from transmission network

Addition of transmission capacity with proper linkage between generating stations and grid s/s by means of new transmission line

will minimize the duration of power supply and frequency interruption.

• Deliver high quality

transmission service

Comply with Power Quality Standards on:

• Voltage Variation

• Transient voltage variation.

• Frequency Variation.

• Harmonics

• Voltage imbalance

• Voltage fluctuation and flicker severity

Capacity addition, augmentation and new transmission line along

with supply of power as per Grid code will be the major criteria for AEGCL. This will allow AEGCL to deliver power with the highest

reliability and quality.

Regular and periodic maintenance schedule will be taken up and all

technical personnel will be properly trained up to meet any challenge at any time.

• Involve the community and/or its representatives in the

whole planning and project implementation cycle

Conduct regular consultations/dialogues with the community/representatives during the project

preparatory, implementation, and post-implementation stages to inform the community on

planned projects and to consider their views on the matter;

• Form and appoint an internal task-force that will be responsible for community relations including the

development of feedback/communication procedures to ensure the flow of communication between the community

and AEGCL

!

!

Strategy Performance Indicator Performance Targets Per Year

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0 1 2 3 4 5

1. Provide adequate

transmission capacity

Percent availability of transmission capacity

including for security reserve 98% 99% 99% 99% 100%

2. Deliver reliable

transmission service a) SAIFI

b) SAIDI

10

10

5

5

4

4

2

2

0

0

3. Deliver high quality

transmission service a) Voltage Variation

b) Transient voltage variation.

c) Frequency Variation.

d) Harmonics

e) Voltage imbalance

f) Voltage fluctuation and flicker severity

10%

Do

Do

Do

Do

Do

8%

Do

Do

Do

Do

Do

5%

Do

Do

Do

Do

Do

5%

Do

Do

Do

Do

Do

5%

Do

Do

Do

Do

Do

4. Involve the community

and/or its representatives in the

whole planning and project implementation

cycle

% of project delayed due to community issues 5% 2% Nil Nil Nil

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b) FINANCIAL PERFORMANCE

Objective: Sustained financial profitability

STRATEGY ACTION PLAN ACTION DETAILS

1. Manage controllable costs while meeting business

objectives

a) Reduce systems loss

b) Eliminate project cost

overruns

a) Abolishing 66kV transmission network and capacity addition of 400/220/132KV transmission system will reduce the transmission losses

b) Introduction of e-tendering and constant monitoring of the work in site, regular co-ordination meeting between task group and field level working

group

2. Improve collection efficiency Reduce outstanding receivables

from APDCL to at most 1 month billed amount

Fresh agreement with APDCL for transmission of power should be done after

requisite approval from competent authority

3. Increase revenue base a) Increase transmission

capacity

b) Provide equity from

internally generated funds for project finance

a) Please refer to Attachment on AEGCL Capital Investment Plan

b) Secure regulatory approval to provide depreciation expense allowance on assets funded by grants

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STRATEGY PERFORMANCE INDICATOR

PERFORMANCE TARGET

Year 0 1 2 3 4 5

1. Manage controllable costs

while meeting business objectives

a) % Systems Loss

b) % of Projects with Cost Over-runs 4.5% 4.25% 4.25% 4.25% 4.0% 4.0%

2. Increase collection efficiency Months receivable outstanding from APDCL

2

months 1 month 0 0 0

MERCADOS EMI - NDPL


3. Increase revenue base a) Increase in transmission capacity

b) % Project equity from internally generated funds

0

40%

70%

80%

100%

100%

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c) BUSINESS PROCESSES

Objective: To adopt and implement industry best practices for efficient and effective business practices in the following areas:

1. Project Planning and Management;

2. Operations, Maintenance and Asset Management

3. Commercial Practices and Management

4. Financial Management and Accounting Systems

!

c.1) Project Planning and Management


1. Reduce bid evaluation time and lag between bid acceptance and start of project implementation in line with industry standard

Adopt e-tendering process Proposal to be submitted

2. Reduce time between evaluation of work order and project closing

in line with industry standard

Proper MIS process Regular co-ordination meeting between

core task groups will be held to complete the projects in time

STRATEGY PERFORMANCE INDICATORS

PERFORMANCE TARGET PER YEAR

0 1 2 3 4 5

MERCADOS EMI - NDPL


Reduce time between bid evaluation

and start of project implementation in line with industry standard

% of achievement in reduction of the time

gap between bid evaluation and start of the project implementation

70% 80% 90% 100% 100%

Reduce time between evaluation of work order and project closing in line

with industry standard

% of achievement in reduction of the time gap between work order evaluation and

closing of the project

70% 80% 90% 100% 100%

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c.2) Operations, Maintenance and Project Management


1. Draw up a comprehensive

operations and maintenance plan

Prepare scheduled and regular

maintenance as and when necessary

Asset mapping, GPS survey should be done to collect data of the transmission

lines, regular trimming of tree branches, providing stolen/missing members of tower and corroded tower foot repairing will be done.

All S/S equipments will go through regular maintenance and will be maintained and monitored by efficient group

2. Draw up and regularly

update a comprehensive fixed asset registry

Prepare comprehensive fixed

asset registry

Identification and location of all fixed assets; reconciliation of asset data (e.g.,

acquisition, installation; as-built maps ); securing service of external appraisal experts for asset appraisal

!



0 1 2 3 4 5

Draw up a comprehensive operations and

maintenance plan % of maintenance plan executed 80% 90% 100% 100% 100% 100%

Draw up and regularly update a comprehensive fixed asset registry

% of progress 70% 80% 100% 100% 100% 100%

!

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d) STAFF AND COMPANY CULTURE

Objective: Maximize productivity and increase morale of the company’s employees

!


1. Improve management and technical skills of

management and staff

a) Draw up a comprehensive Knowledge and Skills Framework

and Job Descriptions for all positions

b) Undertake competency mapping and assessment of the training

needs of current management and staff based on the Knowledge and

Skills Framework and Job Description

c) Where necessary, recruit new officers and staff and/or create new

positions based on the Knowledge and Skills framework identified

d) Draw Up a training plan based on the training needs identified

e) Implement training

a) AEGCL will ensure that every employee has a job description and the key performance indicators to measure performance for each position.

This will be implemented on a phased basis, starting with senior management and being progressively implemented to all levels of

management and staff.

b) Proposed AEGCL’s training plan

i) Periodic planned training/refresher course for increased productivity and quality of service.

ii) Management training to all the officers for increasing efficiency in all departments.

iii)Training in cost control and cost reduction

c) Recruitment of new professionals of engineering and business

education skills. Thus AEGCL will implement a strategy to seek

appropriate management qualifications in its recruitment and selection of new engineers and other professional staff.

d) Introducing a HR policy and rules for internal promotion based on merit (as per objectively measured performance);

e) Identifying high-performing professionals and implementing leadership development programs to develop these staff members.

2. Pay staff equitably according to Industry

Standard and Performance

a) Undertake a comprehensive, comparative pay audit of all

positions relative to their peers in the industry

b) Draw up a performance assessment system that will among others, a)

provide the rating criteria; b) criteria for pay raises and/or

promotions

• The evaluation of all positions within the company, based on the

responsibilities articulated in job descriptions;

• Commissioning and participating in industry salary surveys throughout

the Indian electricity sector;

• Benchmarking internal positions with salaries for comparable positions in

other electricity utilities;

• Determining salary ranges appropriate to each position, with strategic

consideration to how AEGCL salaries will be set compared with the

MERCADOS EMI - NDPL



industry average.

AEGCL will progressively implement the scheme with all levels of

management and staff. Targets will be set for employees based on selected Business Plan KPI’s, and linked to the Performance & Development Plan of

employees.

3. Ensure staff safety, i.e.;

minimize risk to their physical and mental health

while in the work place

a) Document, achieve understanding

and apply workplace safety procedures as required in the

Electrical code (please specify other codes where available) and as

developed internally;

b) provide adequate safety equipments

and other infrastructure; and

c) formulate fitness criteria

corresponding to job positions especially for jobs with high physical

risk ;

d) provide adequate occupational

injury and compensation insurance for high risk jobs.

• Review of existing working procedures, and update of procedures where

required to ensure completeness;

• Aggregate all procedures into an easy-to-read manual;

• Distribute safety manual to all AEGCL employees;

• Train staff in safety procedures;

• Conduct regular safety audits to monitor those safety procedures are being used in all locations.

• Taking inventory of all existing safety equipment in all locations, and assessing the condition of existing equipment;

• Removing unfit equipment, and procuring new equipment to meet operating requirements;

• Establishing procedures for the proper maintenance and storage of equipment.

• Introducing a drug and alcohol policy and procedures, including both regular and random testing of employees in high risk positions, and

suspension of employees in high-risk positions found to be under the influencing of alcohol or drugs in the workplace;

• Introducing a staff medical assessment policy and procedures, requiring annual medical checks by a qualified, independent physician for

employees in high-risk positions, to determine fitness for duties;

• Transferring employees that are no longer fit to safely perform his duties

to an alternative position within AEGCL.

• Where suitable alternative positions are not available over a period of

time (to allow for possible redeployment or regain of health), AEGCL will adopt an early retirement policy to ensure staff safety is not

compromised.

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AEGCL will implement a strategy to make managers accountable for building constructive and positive working relationships with their staff and peers.

This is crucial in order to create a culture of high morale and teamwork.

!

!



0 1 2 3 4 5

Improve business and

technical skills amongst managers and professional

staff

% of staff (Manager & above) with skills as per Job Description (as per Skills Audit)

70% 80% 100% 100% 100%

Pay staff equitably as per

Industry Standard and according to performance

Percentile ranking of company salaries with

industry survey

35th 40th 45th 50th 55th

Zero accident/injury 0 0 0 0 0

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2.3. ORGANIZATION

2.3.1. BUSINESS PLAN COMMITTEE

A Committee will be organized to ensure the implementation and timely updating, where necessary,

of the Business Plan. The Committee shall consist of the Managing Director, as Chairman and the

CGM (AEGCL), CGM (F&A), GM (HR) in the HQ, GMs of the Zones, the GM in the HQ and the DGM for

civil design as the core members.

The Committee will meet once a month to take up and decide on the following matters:

1. Review the progress of implementation according to targets;

2. Consider and decide on any proposal, reports and other matters submitted by the task forces

regarding the implementation of their respective responsibilities under the plan;

3. Where necessary, agree on the adjustment/revisions/updating of relevant provisions of the

plans such as strategies, timetable of implementation of actions ; financing, among others

4. Other relevant matters

2.3.2. TASK FORCES (ONE FOR EACH FOCUS AREA)

Four task forces, one for each focus area, will be formed for implementation of the Business Plan at

the ground level. Each of the Task Force will be headed by a DGM and each Task Force will be

comprised of members up to Assistant Manager /Accounts Officer Level.

• Task Force for Customer and Community Satisfaction will comprise of personnel from

Technical, HR and Accounts departments. Task Force for Financial Performance will comprise

of personnel from Accounts and Technical departments.

• Task Force for Business Processes will comprise of personnel from Technical and Accounts

departments with Sub Task Forces for each of the four business processes namely Operation,

Maintenance & Asset Management, Project Planning & Management, Commercial Practice &

Management and Financial Management System.

• Task Force for Staff and Company Culture will comprise of personnel from HR and Accounts

departments.

These Task forces will monitor regularly the implementation of the Business Plan. The following will

be the responsibilities of these Task Forces:

1. Execution of the Business plan.

2. Reporting the Business Plan committee once a month.

3. Suggesting on the required changes observed while implementing the Business Plan.

4. Other relevant matters.

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2.4. SUB-ANNEXES

Table 22 - AEGCL Key Planning Data

1. Unrestricted Peak Load Demand of Assam by March’ 2017 as per load flow study : 2253.00 MW

2. Present restricted Peak Load Demand : 1060.00 MW

3. Present unrestricted Peak Load Demand : 1225.00 MW

4. a) Present working capacity Generation of Assam Power Generation Company Ltd. : 339.50 MW

b) Present Central Sector Share : 664.00 MW

5. TOTAL OF (4) : 1003.50 MW

6. Expected increase in power availability up to March’ 2012 (self plus Assam’s Central

Sector Share) in AEGCL Grid is as follows -

a) Replacement of Power Project at Namrup : 100.00 MW

b) LTPS Waste Heat Recovery Plant : 37.20 MW

c) Tripura Gas Power : 245.00 MW

d) Bongaigaon Thermal Power Project : 380.00

d) Kameng Hydro Electric Project : 65.00 MW

e) Lungit Mini Hydro Power Project : 6.00 MW

f) Myntriang Mini Hydro Power Project : 9.00 MW

g) Subansiri Hydro Elect. Power station : 208.00 MW

TOTAL OF 6 : 1050.20 MW

GROSS TOTAL (5+6) approx. - : 2053.70 MW

MERCADOS EMI - NDPL


Table 23 - AEGCL Key CAPEX Planning Data

a) Estimated cost for construction of new transmission lines of different voltage levels.

: ` 80650.46lakhs.

b) Estimated cost for construction of new sub-stations of different voltage ratio.

: `183634.96lakhs.

c) Estimated cost for augmentation of transformation capacity and extension of different existing sub-stations.

: ` 25929.71 lakhs.

d) Estimated cost for reactive power compensation : ` 719.31 lakhs.

e) Refurbishment of existing sub-stations. : ` 1793.78 lakhs.

e) Gross Total : `292728.22 lakhs.

f) Base price of Estimate : 2011 – 12 prices.

g) Basis of Estimation of Cost/ Justification : Unit price of different items in the are considered from the already evaluated rates of some items against which supply/ work order recently been issued against some on-going projects (rates of which are still valid), updated rates of some items which were procured earlier & prevailing market price of the balance items (rates of which are not available). Also, rates of PGCIL have been considered for the schemes proposed under World Bank funding as per DPR.

h) Period of Completion : 54 Months from the date of starting (i.e. 2012).

i) Date of Start : August’ 2012.

j) Anticipated date of Completion : All projects by Feb’ 2017.

k) Whether on-going or new project : New.

l) REQUIREMENT OF FUND

A. During the 1st year (2012–13) : `93214.00 lakhs.

B. During the 2nd Year (2013-14) : `52691.00 lakhs

C. During the 3rd Year (2014-15) : `58545.00 lakhs

D. During the 4th Year (2015-16) : `52691.00 lakhs

E. During the 5th Year (2016-17) : `35587.22 lakhs

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Table 24 - Profit & Loss Account

PROFIT & LOSS ACCOUNT

TRANSMISSION

(Rs. In Crores)

PARTICULARS 2007-08 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Audited Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated

ENERGY INJECTED (MU)

4923 4949 5766 6447 6963 7520 8121 8771

ENERGY SEND OUT (MU)

4701 4726 5521 6173 6667 7200 7776 8398

TRANSMISSION LOSS (%)

4.50% 4.50% 4.25% 4.25% 4.25% 4.25% 4.25% 4.25%

INCOME

REVENUE FROM TRANSMISION SERVICE

358.09 432.24 523.61 662.69 784.69 847.46 915.26 988.48

REV SUBSIDIES & GRANTS *

OTHER INCOME

10.14 9.78 9.42 9.05 9.96 10.95 12.05 13.25

TOTAL

368.23 442.02 533.03 671.74 794.64 858.41 927.30 1001.73

EXPENDITURE

TRANSMISSION CHARGES TO PGCIL

170.16 134.24 134.24 200.00 210.00 220.50 231.53 243.10

Repairs & Maintenance

17.53 19.6 21.56 23.72 26.09 28.70 31.57 34.73

EMPLOYEES COSTS

75.33 79.11 85.44 92.28 101.51 111.66 122.82 135.11

ADM & GENERAL EXPENSES

3.64 4.01 4.41 4.85 5.34 5.87 6.46 7.10

DEPRECIATION AND RELATED DTS

15.1 12.13 56.96 93.23 102.55 112.81 124.09 136.50

INTEREST & FINANCE CHARGES

26.88 47.14 83.03 96.17 105.79 116.37 128.00 140.80

SUB-TOTAL

308.64 296.23 385.64 510.25 551.28 595.90 644.47 697.34

LESS: EXPENSES CAPITALISED:

-INTEREST & FINANCE CHARGES CAPITALISED -

-OTHER EXPENSES CAPITALISED -

SUB-TOTAL

0 0 0 0 0 0 0 0

MERCADOS EMI - NDPL


OTHER DEBITS

- 0.28 0.28 0.28

EXTRAORDINARY ITEMS

- - -

BULK SUPPLY TARIFF

48.26 102.86 119.82 133.92 147.312 162.0432 178.24752 196.07227

TOTAL EXPENDITURE

356.9 399.37 505.74 644.45 698.59 757.95 822.72 893.41

PROFIT (LOSS) BEFORE TAX

11.33 42.65 27.29 27.29 96.06 100.47 104.59 108.32

PROVISION FOR INCOME TAX

1.93 7.25 4.64 4.64 29.68 31.04 32.32 33.47

PROFIT (LOSS) AFTER TAX

9.4 35.4 22.65 22.65 66.37 69.42 72.27 74.85

NET PRIOR PERIOD CREDITS

- - - -

PROFIT/(LOSS) AVAILABLE FOR APPROPRIATION

9.4 35.4 22.65 22.65 66.37 69.42 72.27 74.85

LOSS BROUGHT FORWARD FROM PREVIOUS YEAR

-95.99 -86.59 -51.19 -28.54 -5.89 60.48 129.91 202.18

SURPLUS/DEFICIT(-)

-86.59 -51.19 -28.54 -5.89 60.48 129.91 202.18 277.03

NET ASSETS AT THE BEGINNING OF THE YEAR (LESS

CONSUMER'S CONTRIBUTION)

RATE OF RETURN

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Table 25 - Cost Abstract of the 12TH Five Year Plan Related To Intra-State Transmission & Transformation Projects

DURING 12TH PLAN PERIOD (2012 – 17)

(` in Lakh)

Sl. No.

Name of the Scheme

Voltage level wise

addition of Ckt. Kms./ MVA

proposed

Total anticipated

expenditure to be incurred up to Mar’

12

Total amount

proposed for execution of the

schemes

1 2 3 4 5

I NEW SCHEMES:

A Transmission line

1 400 KV 20 Ckt. Kms. 0.00 3691.80

2 220 KV 421 Ckt. Kms. 0.00 30036.40

3 132 KV 1056Ckt. Kms. 0.00 46922.26

B Sub-Station

1 400/220 KV 630 MVA 0.00 25020.00

2 220/132 KV 2000 MVA 0.00 48110.73

3 220/33 kV 100 MVA 0.00 14603.74

3 132/33 KV 1686 MVA 0.00 95900.49

C Augmentation and Extn. of sub-stn.

1 220 650 MVA 0.00 12093.94

2 132 426 MVA 0.00 13835.77

D Reactive power compensation

1 33 kV 130 MVAR 0.00 719.31

E Refurbishment of existing sub-stn.

1 220/132/33 - - 1793.78

June, 2011 Page 7 of 18 Approach paper of 12th Five years Plan of Assam Electricity Grid Corporation Ltd..(AEGCL)

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Table 26 - Interest during Construction of the Proposed Lines and Sub-Stations Works

(Rs. in Lakh)

Year

Expenditure up to the

commencement of the year Expenditure during the year Interest @

9.00% on Col.3 @

4.50% on Col.6

Exp. Made

without interest

10%

Loan Amount

Total of Col.3 & 4

90% Grant Amount

10% Loan Amount

Total of Col.5 & 6

1 2 3 4 5 6 7 8

1st Year 0.00 0.00 0.00 83893.00 9321.00 93214.00 4194.63

2nd Year 83893.00 9321.00 93214.00 47422.00 5269.00 52691.00 10760.36

3rd Year 131315.00 14590.00 46271.00 52690.00 5855.00 58545.00 6798.92

4th Year 184005.00 20445.00 204450.00 47422.00 5269.00 52691.00 20771.60

5th Year 231427.00 25714.00 257141.00 32028.00 3559.22 35587.22 24744.11

TOTAL = 263455.00 29273.22 292728.22 67269.61

NOTE= The Govt. of India and the State Governments of the NE-Region have given special emphasis for overall development of the NE-Region for which development of power sector of the North Eastern States was given a

special priority. Under this policy, the state utilities entrusted with the power sector related activities are getting 90% grant and 10% loan amount for execution of different schemes/ projects in the NE-States for last few years.

Accordingly, the AEGCL has also received fund from different source of funding e.g.- NLCPR, ADB, NEC, etc. for execution of different projects as 90% grant and 10% loan. As there is no indication of change of this policy in

near future so, I.D.C. calculation has been made considering 90% as grant and 10% as loan of total proposed

outlay. !

!

!

!

!

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Assam: Capacity Development of the Assam Power Sector Utilities – Final Report – Transmission IX-221

IX ANNEX TO HUMAN RESOURCE

1. HRSC ROADMAP MPP

a) Identify the key/priority senior management level positions in all three utilities

[Time* 2wks]

• All positions level DGM and up in the three utilities

• Positions in the first two levels of top management in each utility (irrespective of cadre

level)

• Any key new non-management positions resulting from reform (e.g. new marketing

positions)

b) Develop skill/knowledge sets for each position [Time* 2wks]

Summary synopsis for each position

• Technical skills/knowledge

• Managerial and Leadership skills/knowledge

• Any special skills/knowledge (such as negotiation skills)

c) Identify the gaps in these skill/knowledge sets for existing staff [Time* 2wks]

• Survey existing staff to determine which ones have a foundation of these skills/knowledge

• For those having the foundation, determine the gaps (i.e. that could be filled by training)

d) Determine which gaps can be closed by internal training and design

programs/recommend sourcing to do so [Time* 2wks]

• Dovetail with any scheduled training of this consultancy

• Design and deliver training programs

• Determine appropriate external sourcing

e) Identify those positions for which there are no qualified staff (i.e. need to be filled

from outside [Time* 2wks]

• Reconcile into the aforementioned short-term Recommended Approach To Recruitment Plan

*Times shown are for each step and assume dedicated effort, so total time for item 7 of the HRSC

road map would be: 5 x 2 = 10 wks (starting from HRSC in place)

2. HRSC

2.1. CGM HR ROLE

Proposed role:

o Bridge (i.e. based on organisational readiness and do-ability) between the development of

best HRM/Training practices and all three utilities

o Key member of the HRSC (acts as liaison with the three utilities and champions the

development of policy and process in Human Resources/Training

o Help to facilitate, integrate and communicate new developments in Human

Resources/Training within all three utilities, but particularly Distribution

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Position Specifications:

• Experience:

o Seasoned HR/Training professional with minimum 15-year experience in a large

infrastructure industry (5 of those years in a senior management position, ideally in the

power sector).

o Minimum 5-year senior line management experience in a utility.

o Proven excellent performance related to the above.

• Education:

o Post Graduate Degree or Certification in HR/Personnel Management from a recognized

university/Institute, or an MBA degree

• Skills and Knowledge:

o Knowledge of electric utility operations

o Knowledge of the strategic role of Human Resources Management

o Knowledge of best practices (HR/Training), preferably in the context of electricity sector

in India

o Understanding of the key functional areas of HR/Training (i.e. salaries and pay scales,

service conditions and employee benefits, recruitment and selection, training and

employee development, manpower planning, job evaluation, human resources

information systems and records, performance appraisal, organisational development,

legislation applying to staff, union relations, staff relations and dispute resolution, HR

policy, employee engagement and motivation)

o Basic management skills (planning, budgeting, leadership, team building, organising,

delegating, staffing, performance management etc.)

o Excellent interpersonal skills (including motivating and engaging staff, conflict resolution)

o Excellent communications skills (written, presentation, negotiating, mediating,

persuading etc.)

2.2. AUGMENTED HR AND TRAINING ORGANISATION

Priority

(Term)

Position

(Location) Description

Hiring Mode

(Number) Comment

Q-W

(6 mo.)

CGM HR

(headquarters)

See ANNEX CGM HR Role

best qualified

internal (1)

A highly qualified HR executive who can provide leadership to

the development and implementation of all new HR

developments for all three utilities

Q-W

(6 mo.)

HR Executive

Trainee

(entry level)

First Batch to be trained

(generic HR training and worked in according to

process development)

best qualified

external (1) in each of

two years)

Work duties assigned to them in

conjunction with the training

Med.

(2 yr.)

HR Executive

Trainee

(entry level)

Second Batch to be

trained (generic HR training and worked in

according to process development)

best qualified

external (1)

Work duties assigned to them in

conjunction with the training

Long

(2+yr.)

Specifics To be

determined

HR professional,

management and support staff

Specifics To be

determined

Specifics To

be

determined

(18)

1. HR staffing needs to be

determined as HR processes developed and approved per

HRSC

2. Based on National and

International benchmarks there should be 18 HR staff

3. Specifics for these staff,

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Priority

(Term)

Position

(Location) Description

Hiring Mode

(Number) Comment

specifications and hiring mode will be contingent on

numerous variables: processes in place, line

organisation, degree to which the organisation

strategically manages its human resource, geography

etc.

2.3. HIRING (APPOINTING) OF AUGMENTED HR AND TRAINING STAFF

TIMING

(from

start)

STEP METHOD COMMENT

6 wk. Hire CGM HR Distribution • Open competition (external)

• Use ANNEX CGM HR Role

• Advertise externally see ANNEX Sample Job Postings

and Ads

Support by HR consultants in collaboration with

Director PMU

2 mo. Hire University MBA HR

graduate

• Collaborate with university

faculties

• Negotiate with post

graduate MBA hire

• Involve newly hired CGM HR

and Chairperson HRSC) in process

• exceptional (“rising

star”) MBA graduate of the HR program

• grad should represent HR best practices in

the Assam context.

• Involve HRSC

2.5 mo. Orient HRSC, new CGM HR and

U of G MBA HR graduate

• 1-day orientation: overview

HR situation, HRSC TOR

• See ANNEX Training

Program HR Trainees and Management

• Facilitated by Chair

HRSC with support by HR consultants and

2 mo. Hire HR Executive Trainees

first batch (5)

• Entry level external hire

• Collaborate with university faculties to identify bachelor

level HR graduates

• Advertise externally see

ANNEX Sample Job Postings and Ads

• Involve HRSC in process

• Involve newly hired CGM HR in process

See ANNEX HR and

Training Organisation

2 yr. Execute Training program for HR Management Trainee

• See ANNEX Training Program HR Trainees and

Management

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TIMING

(from

start)

STEP METHOD COMMENT

2 mo. Hire HR Executive Trainees

second batch (5)

• Entry level external hire

• Collaborate with university faculties to identify bachelor

level HR graduates

• Advertise externally see

ANNEX Sample Job Postings and Ads

• Involve HRSC in process

• Involve newly hired CGM HR

in process

See ANNEX HR and

Training Organisation

2.4. HRSC ACTION PLAN(S)

2.4.1. CONSULTANT RECOMMENDATIONS FOR PREPARATION OF ACTION PLANS

The following action plans (revisions) are recommended:

• An Action Plan for the first quarter

• An Annual Action Plan Year One for the first year that builds on the Action Plan for the first

quarter

• Action Plans for quarters III- IV of the first year that are revisions of Annual Action Plan Year

One

• An Action Plan for Years One & Two

• An Annual Action Plan Year Two for the second year that builds on the first Annual Action Plan

Year One as well the Action Plan for Years One & Two

• Action Plans for quarters III- IV of the second year that are revisions of Annual Action Plan

Year Two

• An Action Plan Year Three and Beyond (this plan must of necessity be based largely on

“projections” emanating from all previous action plans)

2.4.2. CONSULTANT RECOMMENDATIONS FOR PRIORITY ORDER OF BUSINESS FOR

HRSC (ACTION PLANS)

The HRSC’s first order of business should be to develop two action plans:

1. The first quarterly Action Plan per the HRSC terms of reference (Number One Priority).This

plan should include: (a) deliberation by the HRSC on and gaining approval of the roadmaps

recommended by the Consultants for each recommended action (b) development and

distribution of a Communication Plan as described in the action plan section of this report (i.e.

a plan that encompasses the HRSC terms of reference/modus operandi, membership and on-

going versions of HRSC quarterly action plan and thoroughly taking into account a distribution

to “all that need to know” (senior management, affected management, all stakeholders

involved etc.) and (c) specific role of the HR consultants with respect to each action step

within the time period of the consultancy (this portion of the first quarterly action plan may

have to be revised as needed in subsequent action plans

2. An Action Plan for Years One & Two

2.4.3. MANDATORY INCLUSIONS IN ACTION PLANS

Each Action Plan must cover:

• Detailed description of all actions (steps and sub-steps)

• Sequencing and time targets for all actions

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• Goals of each action and measurement indicators

• Monitoring and evaluation protocol

• Communication requirements (all those that need to know)

• Resource requirements (direct and indirect as applicable, approvals as applicable, monetary

and non-monetary etc.)

• Responsibility assignments

• Professional and management staffing requirements for HR and Training (skills and

knowledge required for HR/Training processes and related types and levels of positions.

2.4.4. RECOMMENDED TOPICS/ISSUES FOR HRSC FIRST QUARTER ACTION PLAN AND

ANNUAL ACTION PLAN YEAR ONE

In this report the Consultants have provided, (in the Action Plan sections) proposed roadmaps for a

number of HRM initiatives. The HRSC, as it gets operational, should drive these initiatives and include

them in HRSC Action Plans. The following table suggests how HRSC role should unfold.

ACTION ITEM DEVELOPMENT/IMPLEMENTATION

Enhance HR Function Minimal up-front role HRSC (input role medium term)

Enhance Performance Appraisal Priority involved role HRSC as soon as possible

Organisation Charts/Sanctioned Posts Input role by HRSC

Organisation Structure(revised) Priority involved role HRSC as soon as possible

Hiring of Law Officer Nil role HRSC

Human Resources Information System Priority involved role HRSC as soon as possible

Manpower Planning and Recruitment Priority involved role HRSC as soon as possible

Promotion Policy Priority involved role HRSC as soon as possible

Preparation for Cos. retirement process -do-

Automated Attendance Records -do-

Motivational Dimensions, Incentives etc. -do-

Enhance HR Function Minimal up-front role HRSC (input role medium term)

Enhance Performance Appraisal Priority involved role HRSC as soon as possible

2.5. HRSC TOR

Suggested Terms of Reference for Human Resources Steering Committee

1. Composition

• Chairperson: to be appointed by the CMD, ASEB. Appointee to be well versed in Human

Resources Management/Development (including HR policy and processes and implementation

of same) and the role of strategic Human Resources Management

• New CGM HR

• Representative appointed from PMU

• Appointee CGM level or higher of CMD Disco (APDCL)

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• CGM HR Genco (APGCL)1

• Appointee CGM level or higher of CMD Transco (AEGCL)1

• Ex officio representative(s)of AF Mercados team2

• Ex officio representative University MBA HR graduate3

• [secretarial support person(s)]4

Notes: 1 In selecting representatives from each of the three utilities the CMDs will collaborate to

endeavour to achieve experience background/representation from Operations, HR and Finance on

HRSC in their choices. In the case of Genco the current incumbent is CGM HR: if this is the case at

the time of selection, then the CMDs Transco and Disco should endeavour to achieve the

representation of Operations and Finance in their selections. Additionally, each appointee must be

either located in the Bijulee Bhawan or be able to attend HRSC meetings there.

2 The role of the ex officio representative(s) of the AF Mercados team will transpire as follows: (a)

interchange between the National and International HR experts according to issues being deliberated

on; (b) participation by them will be for the most part remote (i.e. email); (c) they will be thoroughly

informed of all HRSC actions (meeting notices, agendas, minutes, reports etc.)and where applicable

be given reasonable lead times for making input; (d) their role will be solely to advise, support and

facilitate (especially as relates to the HRSC quarterly action plan and monitoring of same) and (e)

their role will cease once the role of the AF Mercados consultancy ends. However the benefit of a

HRSC will continue into the requisite medium and long term change process for HRM, Training and

Capacity Building.

The hiring of MBA could provide administrative and secretarial support to the HRSC ands/he could be

part of the nucleus for enhancement of the HR function as recommended in the Interim Report 2.

3The MBA HR graduate referred could help with meeting reports, but a secretarial person will be

appointed to do the actual preparation of meeting reports and other documents required by the HRSC

2. Modus operandi (reporting/approvals)

• The HRSC, once it has finalised a specific recommendation (be it policy, process, program,

research/development action, quarterly action plans etc.) will submit it to the CMD Disco

(APDCL) for approval.

• All such recommendations submitted by the HRSC will include information on resource

requirements (budgetary, staffing, use of existing process and staff etc.)

• The CMD Disco (APDCL) will consult with the CMD Genco (APGCL) and CMD Transco (AEGCL)

before approving a recommendation. In cases where a recommendation (or part of a

recommendation) is not acceptable to one of the utilities the matter in dispute will be referred

back to the HRSC to resolve such that there is a consensus: if the matter cannot be resolved

then any of the three CMDs may approve those portions of the recommendation that are

acceptable.

The Chairperson of HRSC may recommend changes deemed necessary in the membership of HRSC, if

such changes are consistent with the composition structure guidelines above. Such recommendations

will be submitted for approval to the CMD Disco (APDCL) or the CMD Genco (APGCL) or Transco

(AEGCL as applicable.

3. Modus operandi (meetings)

• The HRSC will meet as a committee of the whole at least weekly for three hours at a time to

be determined by the committee.

• The HRSC may determine sub-committees or task groups that will determine their respective

additional meeting times.

• A quarterly meeting schedule will be agreed to by the committee and be communicated to all

members of HRSC, and as indicated in the communications section below. This schedule will,

to the extent possible, include meetings of any sub-committees or task groups.

• The Chairperson, with support of the secretary and University MBA HR graduate, will ensure

that a record of attendance is kept of all HRSC meetings. If a member’s attendance is not

satisfactory, the chairperson will try to correct the situation one-on-one with the member

(including determining valid reasons), but if this fails the unacceptable attendance will be

reported to the member’s CMD

• If a member can reasonably know in advance that s/he cannot attend a meeting, then an

appropriate substitute can attend the meeting.

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• The quorum for regular weekly meetings of the HRSC will be the Chairperson (or if necessary

a substitute from PMU) and at least one person from each of the three utilities (including

appropriate substitutes as applicable).

• Reports of all meetings will be kept and communicated as follows: reports of regular weekly

HRSC meetings to all members of the HRSC, reports of sub-committee and task group

meetings to members of these groups and as indicated in the communications section below.

4. Modus operandi (action plans)

• The HRSC is required to work from/according to Action Plans: (a) determined quarterly by the

HRSC. The Action Plans will be approved per the guidelines stipulated above for approvals,

documented and communicated to all members, and as indicated in the communications

section below.

• Each quarterly Action Plan (which are revisions of the annual plans) will : (a) include

Descriptions of actions and goals, Responsibility assignments, Priorities, and Time targets and

(b) be monitored and reported for progress, including a quarter end report

• See also Annex HRSC Action Plans

5. Modus operandi (communications)

• The HRSC will ensure that the following communications protocols are adhered to:

The three CMDs will receive: a current list of HRSC members, HRSC quarterly action plans (as

approved), the quarter end progress report, as well as the HRSC quarterly meeting schedule.

All managers from the manager level and up will receive a copy of the current list of HRSC members

and each annual and quarterly action plans. Sub-committees and task groups are expected, as part of

their modus operandi, to keep managers affected by their actions informed.

2.5.1. PERFORMANCE APPRAISAL

a) Develop a summary of the existing process

a.1) Audit all performance appraisals done in last 18 months for all Class I and II employees (these

records held by the current Director Personnel, ASEB)

For purposes of this audit “format” means a list of all applicable: (a) performance criteria (job

related skills, interpersonal skills, communication skills, managerial skills, position specific objectives

(targets), work ethic factors such as attendance, knowledge of policy, etc.); (b) education and

credential information recorded; (c) performance gap information recorded; and (d) employee

development and training information recorded.

The audit should outline the following for each type/position of Class I and II employee:

• What appraisal format was/is used?

• Outline and description (including rationale) of participants in the system (i.e. employee being

appraised, person(s) doing appraisal, person(s) approving/reviewing appraisal).

• Outline time cycles for all participants.

• Tally of completions done by participants in the system (i.e. records of completions), including

whether within prescribed time cycle.

• Synopsis of documented performance plans/targets resulting from appraisals.

• Record of linkage between performance plans/targets and subsequent appraisals.

• Record of communication between participants (particularly to the person being appraised.

a.2) Summarise the existing process

Prepare a descriptive summary of the existing performance appraisal system that captures all of the

information garnered from the audit, including appropriate flow charting for each type/position of

Class I and II employee.

b) Identify Relevant Performance Criteria

b.1) Reference Best Practices

Use the input of the National and International HR experts on benchmarks, as well as the relevant

information contained in the September 2010 Price water house report

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Agree on Performance Criteria Taking into account 2.1 develop recommendations for the performance

criteria for the Three Utilities. In so doing (a) obtain input from the MD (or delegate) for each utility

and (b) take advantage of relevant previous suggestions contained in other consultancies of the

technical Assistance of ADB.

c) Develop Performance Appraisal System for Class I and II Employees

Taking into account 2.3 develop recommendations for a Performance Appraisal System for Class I and

II Employees for each of three utilities. In so doing (a) obtain input from the MD (or delegate) for

each utility and (b) take advantage of relevant previous suggestions contained in other consultancies

of the technical Assistance of ADB.

Note: it has been recommended that the HRSC deal with Performance Appraisal up-front as a priority

action item [see Annex HRSC Action Plans]. This action would involve a more thorough researching of

the required process.

2.6. SAMPLE ADS FOR CGM AND HR EXECUTIVE TRAINEES

2.6.1. CGM HR

Chief General Manager – Human Resources

Assam Power Distribution Company Limited

An exciting opportunity for an experienced HR executive to participate in the reform of the power

sector in Assam, while benefiting from the potential for excellent career growth. Attractive salary will

be commensurate with qualifications and experience.

This position involves providing Human Resources management leadership in the power distribution

utility, while also being a key member of a Human Resources Steering Committee developing

strategic HR policies and processes for the generation, transmission and distribution utilities.

The successful candidate will:

• Have a degree from a reputable university, preferably with a post-graduate MBA degree in

Human Resources or equivalency in terms of other academic disciplines and course taken,

combined with experience.

• Possess knowledge of: electric utility operations and electric power sector in Assam/India,

strategic role of Human Resources Management and knowledge of best (HR/Training) practices

preferably in the context of electricity sector in Assam/India.

• Be able to demonstrate having the skills of a senior manager.

• Have proven successful experience: at least five years in senior operations management in a

utility, at least five years in senior HR/Training management in organisations of 1000+

employees and minimum 10 years of experience in ASEB.

Interested candidates, with credible references are encouraged to apply.

2.6.2. HR EXECUTIVE TRAINEE

HR Executive Trainee

Assam Power Utility Companies

An exciting opportunity for a qualified current year graduate of a reputable university who is

interested in starting a career with huge potential in the Assam power sector utilities.

This position involves a regimen of training in Assam’s power sector at a time when the utilities are

poised to develop strategic changes in the way Human Resources are to be managed. While being

trained, through classroom courses aligned to the utilities’ context and on-the job assignments,

candidates will be groomed to take up challenging paths for career growth in Human Resources

Development (HRD) and Human Resources management (HRM)

The successful candidates will:

o Have a degree from a reputable university, preferably with a post-graduate MBA degree in

Human Resources, although graduates of other academic disciplines, who can demonstrate an

interest in HRD and HRM, will be thoroughly considered

o Possess skill attributes that suggest a promising career in HRD and HRM

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o Have excellent interpersonal skills (including motivating and engaging staff, conflict

resolution)

o Have excellent communications skills (written, presentation, negotiating, mediating,

persuading)

Interested candidates with credible references are encouraged to apply.

2.7. TRAINING PROGRAM HR TRAINEES AND MANAGEMENT

2.7.1. HR ORIENTATION FOR HRSC

Once the Human Resources Steering Committee (HRSC) is established and the CGM HR and U of G

MBA HR are in place to conduct a 1-day orientation for all of them which provides an overview of the

HR situation in the three utilities and an explanation of the terms of reference for the HRSC. This

session should be collaboratively prepared by, and facilitated by the Chair HRSC and the HR

consultants.

2.7.2. CLASSROOM TRAINING

a) Content

• Overview of the electricity sector in India, challenges faced by Assam Electricity

sector

• Electricity Act of 2003: its main features

• Reforms in the Sector; with special reference to human resource management

• Role of HR and Training in support of organisational goals (including overview of key

elements of strategic management of human resources)

• Overview of the key functional areas of HRM (including, salary administration,

performance appraisal, employee communications, conflict resolution, HR policies, HR

programs, HRIS etc.)

• Overview of Training in organisations (TNA, program design and evaluation, delivery

methods, training policy etc.)

b) Scheduling

• Cumulative 8 weeks: 1 week modules spaced so that on-the-job training can be

performed in between

• Plan to be developed by the senior HR management of each utility in conjunction with

the HRSC

2.7.3. SOURCING

• HR consultant

• Placement Services of Universities/Recognized Professional Institutions

2.7.4. ON-THE JOB TRAINING

• Rotational job assignments to expose trainees to different functional areas of the

power utilities.

• Work assignments dovetailed with developmental tasks of HRSC

• Plan to be developed by the senior HR management of each utility in conjunction with

the HRSC

Technical Assistance Consultant’s Report AEGCL-HUMAN RESOURCE MANAGEMENT ... NOTES ON THE TEAM ......

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