Chairman's Message

Dear Colleagues,

At the outset, I extend Season's greetings and a Very Happy New Year. I wish you and your family health, progress and prosperity!

The enactment of Electricity Act, 2003 along with other initiatives has outlined the contours of a suitable enabling framework for the overall development of the power sector in the country. As a result, power sector in India is on the brink of witnessing a gradual transformation from a monopolistic market structure to a market featuring a vibrant competitive milieu characterized by self-sustaining and viable growth. I sincerely believe that similar to any industry, in the case of electricity supply also, the client interface or the distribution segment is the most critical element of the business because distribution is the area where energy flows are converted into cash flows. Thus for the operation of the power utilities to be sustainable in the long run, the performance of the distribution segment plays an extremely vital role.

It is in this context that our major focus should be on distribution reforms through effective loss reduction, better collection efficiency and improved consumer care. Undoubtedly, successful implementation of RAPDRP is going to play a crucial role in achieving this objective and if we fail to get it going this time, it is going to be a costly and historical miss. Therefore, I sincerely urge all of you and specially those, who are directly involved, to undertake this exercise on war footing by timely completion of GIS mapping, consumer indexing, capacity augmentation, re-conductoring, installation of new sub stations and lines, replacement through aerial bunched cable and installation of meters on distribution transformers etc. It is also my contention, which needs corroboration that with increasing consumer base and dwindling employee strength, technology and technology alone can be panacea. Accordingly, we must attempt to introduce advanced technological interventions in entire gamut of metering, billing and collection related activities to strike some kind of reasonable success, which will be our first step towards "Turn around". In this context, I see rapid IT applications taking centre stage to make reforms saga a reality.

Whenever reform issues are talked about, we have a natural tendency to look towards the U.S. and Europe. Reasons are not difficult to understand as reform exercise itself is dominated by experience of these countries. However, we need to understand whether these models are suitable for India, due to political, economic and cultural plurality. Secondly even if these models are quite appropriate for us, we cannot adopt them overnight, given the prevailing situation. Uttar Pradesh is a State with enormous diversity across regions and in fact diversity persists even within region, especially between rural and urban areas. This is of crucial Significance, as more than 60% of our population lives in rural areas, whose interface with our policy makers is at the minimum. Ignoring this peculiarity may derail the reform agenda altogether. There are good reasons to believe that sector reforms should not be restricted to corporatization and independent regulation. These are essential first steps that are

necessary, but not necessarily adequate to bring about improved efficiency and governance, and greater responsiveness to consumers' needs.

I strongly feel that the level of inefficiency UP power sector is so pronounced that there are adequate avenues for "quick-wins" to obtain benefits in the short term particularly on aspects like metering billing and collection related losses, while investments for long term benefits are rolled in. Thus a two-pronged strategy to deal with the issues is essential. This must form an integral part of the overall reform plan, that would encompass the sector restructuring plans, utility business plans, financial restructuring plans, etc.

Equally important is the need to ensure institutional capabilities in the utilities to meet and exceed the reform goals. Operating in a monopoly environment with little commercial accountability has dulled the inherent skills and capabilities of personnel in this organization that has at one time attracted the brightest and best technical talent. There is a need to revive those skills and capabilities through sustained training and capacity building efforts. With rapid strides in technology and sea change in the operating paradigm of the utilities, this will indeed be an uphill task. However, for the reform process to be successful there could not be a task that is of greater importance. Investing in people is also the surest way to obtain their buy-in for the process and reduce their sense of insecurity in the new environment. During my short stint as Chairman UPPCL so for, I have always tried to share this intent with all of you, through my words as well as actions, as I staunchly believe that communication of this

intent to the employees is as important as the initiative to carry out this intent. Equally important is the adequacy of information to continue the reform initiatives, lend measurability to the targets and achievements and also to reduce the risks for all stakeholders. It is apparent that the demands of the new operating environment are going to be very different from those in the era of integrated utility operations.

I am hopeful that the utilities will rise to the challenge and look at reform initiatives afresh with the aim of carrying out genuine improvements in service and efficiency and making Uttar Pradesh an attractive destination not only for investment in the power sector, but also in the larger economy of the State. The power sector is the flag-bearer of development of any economy, and the state of the power sector is often an accurate reflection of the state of the economy. Therefore, it is for us to take note of this important social and economic responsibility that has been cast upon us and take necessary measures to propel the State ahead. It is agreed that the difficulties to bring about additional change in case of management of public utilities is immense but then making the simple complicated is trite but

making the complicated simple, awesomely simple, that's creativity, which is required of us. It is in this context that I wish to urge myself and to appeal to all of you to imbibe few words from ancient wisdom:

"All truly wise thoughts have been thought already thousands of times; but to make them truly ours, we must think them over again honestly ,till they take root in our personal experience.

Johann Wolfgang von Goethe (1749-1832)