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Satish Mathur

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TOP BRASS

The Rural Electrification Corporation(REC)will shortly be entering into capital market.The Government of India has recently approved issue of an Initial Public Offer(IPO) by REC of 15.6 crore share of Rs. 10 each constituting 20% of free issue paid up capital,said REC dashing a go getter Chairman and Managing Director(CMD)Mr.Anil Kumar Lakhina.
"REC hopes to deliver India's rural electricity infrastructure in all its villages within the next three years, by 2009,"said Mr.Lakhina in an interview to the "whispersinthecorridors.com"The REC has secured record external assistance of Rs. 1240 Crores from international bilateral funding agencies viz. Japan Bank for International Cooperation (JBIC) and KFW, Germany during 2005 -06. We are presently negotiating with a number of players to further double the disbursement in generation activity during 2006 -07 and treble by 2008.

Mr.Anil Kumar Lakhina also said that both JBIC & KfW have assured their continued support to REC for upgrading the T&D System in other states also in the coming years.
REC is presently putting into place strategic initiatives to accelerate the growth.
REC has undertaken the task of development of transmission projects to be offered through tariff based competitive bidding for transmission service. For this, a wholly owned subsidiary company is under formation
Due to availability of REC standards & construction practices for various items in RE works, there has been uniform adoption by state power utilities resulting in cost effective and technically sound systems for rural electrification.He said that the Corporation has also been successfully advocating adoption of innovative and cost effective technologies to many state power utilities for improvement in quality and reliability of power supply, thereby enhancing the customer satisfaction. Here goes his interview:

1. What led to formation of REC and how as it evolved over the years?

Electricity plays an important role in socio-economic development of rural areas.

When India became independent in 1947, electricity was available in only a few villages close to town and cities. Rural Electrification as a planned programme was initiated in the country in 1951 with the launch of First Five Year Plan and as on March 1951 only 3061 villages had access to electricity and 21,000 irrigation pumpsets were energized.

The wide spread drought period of 1966-67 focused alternatives on the urgent need to ensure food security raising food grain production. Rural Electrification Programme was accorded priority as an infrastructural input for agricultural production programmes through improved surface irrigation facilities and this led to formation of Rural Electrification Corporation in 1969.

Incorporated on July 25, 1969 under the Companies Act 1956, REC is a wholly owned Govt. of India Public Sector Enterprise with a net worth of over Rs. 4198 crore as on 31.3.2006.

From an institution initially dependent wholly on Govt. budgetary support, it has now evolved into a self-sustaining 'AAA' rated financial institution and have since 2002-03 received its expanded mandate to extend financial assistance for all power sector needs/requirements including transmission, generation & distribution both in public & private sector beyond the erstwhile limit on population, geographical location of plants.

2. What has been the thrust on Rural Electrification Programme during various
plan periods?
Upto the 7th Plan (1985-90) emphasis on rural electrification has been primarily on village electrification and pumpsets energization and part of the village electrification from 6th Plan onward was covered under MNP.

During 8th Plan, besides the village electrification and pumpset energization, the emphasis on RE programme also shifted to electrification of rural households, improvement in power distribution system in rural areas and reduction in T&D losses in power supply to rural areas.

The Rural Electrification for the 9th Plan aimed at the Rural Electrification & Power Distribution Programme (RE &PD) covering electrification of villages, dalit bastis, hamlets, energization of pumpsets, integrated system improvement and other activities like Kutir Jyoti, small power generation, rural electric cooperatives and consolidation of gains of RE.

During the 10th Plan, the major stress of REC has been to meet the need and requirement of State Power utilities for strengthening and upgrading the T&D system aimed at providing reliable and quality power supply to consumers and reduction in T&D losses.During this period, Indian Government also launched the Accelerated Power Development Reforms Programme (APDRP) to contain T&D loses. The APDRP has two components loans and incentives.Under the loan component, government. provides funds up to 50% of the project cost of which 25% as grant and 25% loan. The remaining 50% is being provided as counter part funds through loans from REC/PFC. REC has been the lead financial institution in providing counter part funds to various State Power Utilities.

3. To what extent REC has succeeded in its main activities of expanding Rural
Electrification in the country?

REC has made stupendous efforts in the area of Development of Power Infrastructure in Rural India:
Year Status of village electrification/pumpset energization
1969 74,000 villages electrified
1.1 Million pumpsets energized
2006 4,38,969 villages electrified
14803698 pumpsets energized

Under REC's financed schemes, 3,06,010 villages have been electrified and 85.65 lakh pumpsets have been energized (As on 31.03.2006). Thus 70% of the total villages electrified and 58% of the total pumpset energized have been funded by REC.

4. What steps have been taken by REC towards Standardisation and
Technology upgradation to reduce transmission and distribution losses?

(i) REC Specifications & Construction Standards

While financial constraints and shortage of power are two major contributing factors for sub-optimal performance of power distribution systems, the situation can be substantially improved within the available resources by adopting innovative and cost-effective technologies. Since its inception in 1969, REC has been playing a lead role for standardization of equipment and uniform construction practices to be adopted throughout the country. Standardization results in uniformity and economy in material procurement, minimized inventory, improved quality and standards of construction activities, all of which leads to overall reduction in costs. Standards also lead to safe and better operation and this is of considerable consequence in the area of rural electrification in a vast country like ours. As a result of sustained efforts of the years, REC has been able to issue 74 material specifications, 234 construction standards and 14 manuals for use by the power utilities/power industry. Due to availability of REC standards & construction practices for various items in RE works, there has been uniform adoption by state power utilities resulting in cost effective and technically sound systems for rural electrification.

(ii) State of Art Technologies

REC has also been successfully advocating adoption of innovative and cost effective technologies to many state power utilities for improvement in quality and reliability of power supply, thereby enhancing the customer satisfaction. Some of the technologies are 11 KV pole mounted switched capacitors, 11 KV sectionalizers, FRP cross arms, single phase transformers, Completely Self Protected (CSP) transformer, All Aluminium Alloy Conductors (AAAC), Aerial Bunched Cables (ABC), LT switched capacitors, Amorphous Core Distribution transformers, 5 KVA distribution transformers and prepaid metering system.

5. What are the various financing instruments of REC in the T&D Sector?

For accelerating economic growth & achieving higher standards of living, depending upon the availability of adequate and reliable power at an affordable price, REC has over the years being consistently expanding and diversifying its loan portfolio to meet the emerging needs of power sector. Today, REC has in its portfolio, projects tailor-made suiting to the requirement of power utilities aimed at upgradation of T&D system and reduction in T&D losses. Some of the existing financial products of REC are as follows:
(i) System Improvement schemes
To improve the state power utilities' transmission and distribution system, REC has been financing system improvement projects on a large scale since 1987, to improve efficiency of electrical network, reduce T&D losses and improve the quality of power supply and voltage profile.
(ii) Infrastructure schemes
Financing of projects for creating infrastructure for meeting the load growth, which would help in commencement of various new projects replacing the ageing assets and modernizing the transmission and distribution sector.
(iii) Equipment Financing
REC also specifically focused on the huge quantum of equipment purchase required to be made by the utilities every year to replace the worn out and damaged/repaired equipment as also new equipment required for load growth by financing equipment purchase schemes.
(iv) HVDS
In keeping with the increasing focus on reduction in AT&C losses, REC is financing HVDS schemes on a large scale. Reduction of the technical and commercial losses is achieved by implementation of High Voltage Distribution System (HVDS) in place of conventional Low Voltage Distribution System (LVDS) for all LT feeders feeding agricultural loads by eliminating the long LT lines feeding Agricultural loads from high capacity distribution transformers.
(v) Rural load management schemes
New technology rural load management schemes are also being financed by REC to help utilities manage rural loads by segregating agricultural loads and restricting the hours of supply to them while continuing to proving 24 hours supply to lighting loads in villages. Segregation of agricultural feeders and single phasing schemes are also being financed by REC.
(vi) Metering Schemes
Schemes for procurement and installation of high quality and high precision meters to replace the old, worn our and repaired meters and also for releasing new connections are being financed by REC. This helps in accurate metering and reduces the Aggregate Technical and Commercial (AT&C) losses.
(vii) Capacitor Schemes
Schemes for procurement and installation of capacitors to improve the power factor of the system, resulting in system efficiency and better quality power to consumers are being financed by REC.

6. Whether REC is financing any generation projects and what have been the
achievements so far?

From the time, REC received its expanded mandate in 2002 - 03, to finance all kinds of generation projects, from a sanction of Rs. 661 Crore and disbursement of Rs. 92 Crore in that year, the business has grown to Rs. 6006 Crore and Rs. 1553 crore respectively for the year 2005 -06. The sanctions have grown almost 10 times and disbursement 17 times in less than 4 years. The share in private sector has also grown steadily to 36% during 2005 - 06. We are presently negotiating with a number of players to further double the disbursement in generation activity during 2006 -07 and treble by 2008.

7. What is Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) and REC's role
in its implementation?

The Indian , in April 2005, launched the new scheme - 'RGGVY' scheme of Rural Electrification Infrastructure and house hold electrification in order to fulfill the National Common Minimum Programme (NCMP) objective of providing electricity to all households and improving rural electricity infrastructure. The RGGVY scheme is primarily being implemented through single nodal agency i.e. REC. This is one of the most ambitious projects undertaken by REC. It engrosses the rural electrification and in turn overall development of rural India.

The emphasis of the scheme is not merely electrification of villages but to provide access to electricity to all rural households and also to cater to the requirement of agriculture and other activities including irrigation pumpsets, small medium industries, Khadi & village industries, cold chains, health care, education and IT. This would facilitate overall rural development, create new employment opportunity and result in poverty alleviation.

The services of Central Public Sector Undertakings (CPSUs) have been offered to the states for assisting them in the execution of rural electrification projects as per their willingness & requirement under the RGGVY scheme. With a view to augment the implementation capacity of the programme, REC has entered into Memorandum of Understanding (MOUs) with NTPC, Power Grid, NHPC and DVC to make available CPSUs project management expertise and capabilities to states wishing to use their services.

REC has met the target for creation of rural electricity infrastructure in the record 10169 villages in the states of Bihar, UP, West Bengal, Rajasthan, Uttranchal & Karnataka during 2005-06. REC is now striving to achieve the target of providing electricity infrastructure to another 40,000 villages during 2006 - 07 and so far 11,846 villages have been provided electricity infrastructure.

REC hopes to deliver India's rural electricity infrastructure in all its villages within the next three years, by 2009. The programme has unprecedented in size and is, naturally, propelling the organization on to exceptional performance frontiers.

8. What has been the International Funding Agency's role in financing and
capacity building activities and the assistance received by REC from
these agencies?

REC has secured record external assistance of Rs. 1240 Crores from international bilateral funding agencies viz. Japan Bank for International Cooperation (JBIC) and KFW, Germany during 2005 -06.

· Japan Bank for International Cooperation (JBIC) assistance
JBIC has sanctioned a loan assistance of 21billion yen (Rs. 835 crore) for setting up of new 33/11 KV substations and augmentation of existing substations in the States of AP, MP & Maharashtra with the objective of improving the sub transmission system by relieving the existing overloaded system and reducing the T&D losses and expanding access to electricity for un electrified households and other rural loads thereby improving living standard of local residents and promoting economic and social development in the concerned areas.

· Indo German Bilateral Cooperation for Energy Efficiency Program
Under Indo German Bilateral Cooperation. KfW, Germany has sanctioned financial assistance of 70 million EURO (Rs. 410 crore) for HVDS program of APSPDCL with the objective of reduction in distribution losses, failure rate of distribution transformer and avoidance of theft in agriculture sector, and in the process, improving the financial sustainability of the Discoms.

Both JBIC & KfW have assured their continued support to REC for upgrading the T&D System in other states also in the coming years.

USAID Assisted Distribution Reforms, Upgrade and Management (DRUM) Project
DRUM aims at enhancing access to electricity and water through power distribution reform activities and demonstrating best managerial, commercial and technological practices that improve the quality and reliability of "last mile" power distribution.

An alternative model with technical assistance and guidance from Rural Utilities Services (RUS), US Department of Agriculture (USDA) is being developed for financing rural electricity utilities to make them viable and sustainable in the long run through development of community ownership, by exposing project implementers to International technical, financial and managerial best practices, to be tested though pilot projects in collaboration with respective state governments.

Clean Development Mechanism (CDM)
In view of the tremendous potential for CDM in energy efficiency and conservation projects in T&D systems, MOP has designated REC as the nodal agency responsible for promoting CDM in respect of these projects. REC plans to offer technical and financial assistance to the State Power Utilities/Discoms, for preparation of such projects for CDM, and to enter into suitable cost/revenue sharing arrangements with the project promoters.

9. How REC is going to meet the large scale fund requirements of the various
States/borrowers for their generation/transmission/distribution projects
in future?

REC is presently putting into place strategic initiatives to accelerate the growth. The panorama of infrastructural development in the power sector provides many exciting opportunities. The fund requirement has dramatically increased to fill the gap in demand and supply.

In the recent years banks and financial institutions have been competing with each other & with REC and offering more concessions and facilities to borrowers in power sector to sustain their lending business. REC has been alive to this environmental challenge and has been constantly taking innovative measures which include raising the funds from market at most competitive rates and expansion & diversification of loan portfolio.

Of late, REC has initiated entering into statewise/borrowerwise MOUs for large scale lending to meet their expansion programmes. The first such MoU has been entered into with the Govt. of Maharashtra and the three power utilities of the state viz. MahaGenco, MahaDiscom, MSETCL for a record Rs. 15000 Crore funding programme for power projects in the state to be implemented over a period of next three years. Both urban and rural sectors will immediately benefit through commencement of various new power projects in the state, replacing ageing assets and modernizing the transmission & distribution sector. The people of Maharashtra will have an enhanced supply of reliable power, reduction in T&D losses and consequent increase in production capacity of power.

With Maharashtra MOU put in place, many more states viz. Karnataka, Rajasthan, Tamil Nadu and Haryana etc. are now close to entering in MOUs for their long term funding requirement.

10. What are REC's plans for issue of an IPO in the near future?

The Government of India has recently approved issue of an IPO by REC of 15.6 crore share of Rs. 10 each constituting 20% of free issue paid up capital. The IPO is being issued for meeting the following objectives:

· Enhanced equity base of REC to enable it to meet the growing investment needs of the power sector.'
· An IPO would reduce REC's D/E ratio. A moderate debt equity ratio would keep REC's AAA rating and competitive borrowing power intact.
· The IPO would also enhance the image of the Corporation in the investors' eyes, increase transparency and accountability.
· Value would be unlocked through listing. Public participation in the growth of the power sector and broad basing the equity shares of REC with attendant advantages.
· Improved corporate governance, which would made REC more competitive and enhance value.

11. Whether REC is contemplating any subsidiary companies in transmission
and distribution?

i) Transmission Sector: REC has undertaken the task of development of transmission projects to be offered through tariff based competitive bidding for transmission service. For this, a wholly owned subsidiary company is under formation.
ii) Distribution Sector: To set up centers of excellence for distribution of power and to take up rural distribution, a wholly owned subsidiary company of REC for distribution is under formation.

12. What are REC's future plans to mitigate the aggregate technical and
commercial losses and to meet the vast requirement of funds of
power sector Companies?

The power sector is one of the prime driving forces of the country's GDP. Reliable power is essential to keep the engines of our economy running.Macroeconomic trends are crystal clear on the need for huge efforts to adopt measures towards increasing generation,improving distribution and extending transmission. This has also underscored the need for developing the transmission sector,whilst reforming the distribution sector. Ageing transmission and distribution infrastructure is not only leading to losses, but is also swallowing precious power availability. As it is, surviving with 50% and 35% losses in many rural and urban areas, respectively, is a tough task indeed. REC will be in the forefront to reform and improve these departments. We are determined to help reduce Aggregate Technical & Commercial losses by 10 to 15% to make the utilities viable and our financing secure.

We estimate the improvement and rejuvenation programmes to cost about Rs. 1,50,000 crore. REC intends to raise its cumulative business sanctions from Rs. 99,000 crore to Rs. 1,50,000 Crore, double its annual lending from Rs.8000 crore to 16,000 crore, increase its asset value from Rs. 25,000 crore to Rs. 50,000 crore and increase its net worth from Rs. 4,200 Crore to Rs. 6,500 crore by 2009.
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Haldar is new IB Chief

P C Haldar has been appointed new Chief of the Intelligence Bureau.1970 batch Bihar cadre IPS officer Haldar will succeed E S Laxminarsimhan on January 1.
( We said this on October 3 and again on December 13)

1973 batch IAS to be Special Secretaries
1973 batch IAS officers are likely to be promoted as Special Secretary in the Government of India in a week or two.

Who will move from Power Ministry ?
Two 1973 batch IAS officers are to be given Secretary rank in the Power Ministry. One thing is certain either U N Panjiyar or Ajay Shankar will move out of the Ministry.

Sinha to be promoted
Upendra Kumar Sinha is being promoted to the rank of Additional Secretary in the UTI Mutual Fund. He is 1976 batch IAS officer of Bihar cadre.

A pleasant surprise
Officials in the Urban Development Ministry had a pleasant surprise when they saw the newly posted secretary M Ramachandran, speaking fluent Hindi. He was Uttaranchal Chief Secretary till recently.

IPS sore over discrimination
IPS lobby across the country is said to be sore over the alleged discrimination meted out to them. "While the cases of IAS belonging to 1973, 1974, 1975 and 1976 batch has been reviewed three times, in many cases even four times, their cases have not been reviewed even twice", they say.

Virendra to get promotion
Virendra is being promoted to the rank of IG in the BSF in a couple of months. He is 1985 batch IPS officer of West Bengal cadre.

Milap Jain to be CCIT Delhi !
Milap Jain is likely to move from Jaipur to Delhi as Chief Commissioner of Income-Tax early next month.

Sen may get assignment in MHA
Andhra Pradesh DGP, Swarnjit Sen, who is retiring by this month end may be appointed by the MHA in the Nagaland Security Council. He is 1968 batch IPS officer.

CS and DG in UP to go before polls !
Will the Chief Secretary and Director General of Police in Uttar Pradesh go before the ensuing state polls? Yes, if one was to go by the recent comments of the CEC, Gopalaswamy.

1989 batch IPS are now IGs in Punjab
Three 1989 batch IPS officers - Ms Parag Jain,H S Randhawa and Sanjiv Kalra - have been promoted to the rank of IG in Punjab.

Vohra to move Islamabad
Manpreet Vohra is moving from Nairobi to Islamabad in place of T C Raghavan

FORUM

Quitting service is not an easy job !
Quiting Service to join Private Sector is not as easy as made out to be. If a Civil Servant wants to quit (i.e. take premature retirement) and take up employment in private sector, he needs GoI permission (for a period of 2 years after retirement). The average time for clearance is about 8 months.The lucky ones get it in about 6 months. Is this fair? The permission ought to come forth in about one month (max two months)because the officer cannot afford to remain unemployed for 6-12 months after quitting the Government Service. There should be a provision in the rules that if the permission (for post-retirement employment) is not denied within 60 days after the application, it must be deemed to have been granted. Moreover, the period of 2 years needs to be reduced to 6 months.
P.D.Karandikar

There should be contractual assignment
I think that bureaucrats should be selected on contractual assignment of 3 to 5 years for important posts. It will ensure quality and performance as well as give wider choice. Each person will have to update his skills. The question of the option to work in private sector will become redundant.

Shailesh

We still have no maturity
While there is no two opinion about the supremacy of IAS in running the administration of the country, what is distasteful is the way it has been sought to be emphasised in this portal by the ilk of Rajiv Rattans.
What is the complex he is suffering from when he is advocating against giving better status, pay, promotions and perks to other services. All this certainly would not take away his tag.
I think, as a race, we still don't have the maturity of honouring all those who render services to the country. This imperious attitude doesn't auger well for the country when it comes from a cadre charge of country's future in every sphere.
Thankfully not every one thinks like Rattan.
A bit of humility please.
Saroj Pradhan

Aaj Ki Aawaz

Rahul for UP Chief Ministership????
Laloo shooting form the hip!!!!

Being the Chief Minister of UP needs a lot of experience and experience at caste and creed based politics!!! And why should Congress project Rahul the Captain of the Congress team when it knows its going to come fourth in the UP Tourney…. at best could come third!!! L for Laloo and L for ludicrous!!!

Amrinder is a very vindictive man,
Has ordered PP to beat them up whenever and wherever they can !!!

Nowadays PP or Amrinder's Gestapo is beating striking Teachers black and blue all over Punjab!!! Basically its said that a weak man is a cruel man and there is no doubt that Amrinder is a very weak man!!! Hopefully when the Akali's come they'll gave this man as a taste of his own medicine…….. not because Akalis are also weak men but to teach Amrinder a lesson!!! And by that way now that Amrinder's in a Letter of Rogatory mode, why doesn't he get a couple of Letters to probe his and his son's assets abroad???? The Mega Projects scams and the Punjab Intranet Scam are reasons enough warranting Letters of Rogatory!!!

Didn't know that Diggy Raja is a street fighter of hooligan,!!!
Thought he was a bhalla manas and peaceful jann ( person)!!!

A person protesting Digvijay going to a Sabha blocked Diggy's car and Diggy got out of his car beat the person black and blue!!! Actually Diggy has sent a message to his colleagues in the Party in Delhi to handle him with care!!

In UP if you are a Minister in the SP Sarkaar you have license to kill,
And when it comes to having affairs you can have your fill!!!

Ministers in SP Sarkaar are known to kiss and kill!!! Amarmani did it and now two more Ministers are alleged to have bumped off a Lady Love…… its alleged the Lady was blackmailing them!!! And usual the UP Police has come out to protect the Ministers and even though various leads have to be investigated they has given the Ministers a Clean Chit!!!!

Colonel Vengsarkar the first and only Colonel with the brains of a Army Cook,
Ne karr diya Pathan ka wapasi ka ticket book!!!

The man is a shame to Colonels ….. Colonels should unite and sue this man for tarnishing their name!!! 'Doodhwala' Sehwag has been allowed to continue despite his miserable performance and Pathan has been sent back!!! This is BCCI for you……… Bewakoofs Controlling Cricket in India!!!! And imagine the Head Bewakoof Sharad Pawar is aiming to become the President of ICC…. if this happens then ICC will mean………Idiots Controlling Cricket!!!!

Bharat Kumar
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CORPORATE

Reliance to hire 100 Expat Managers
Reliance retail is in the process of hiring 100 senior expat managers which will be India Inc's single largest international poaching drive. It is learnt that Reliance Retail's HR head Bijay Sahoo is abroad scouring the overseas markets for retail talent.

Bandopadhay is VP
Shankar Bandopadhay has taken over as vice-president (sales & marketing) of Phoenix Yule Limited