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Orissa govt appoints CEO to manage Cesco

Imran Khan in Bhubaneswar

In a major set back to AES-managed Cesco, one of the four private power distribution companies in Orissa, the Orissa Electricity Regulatory Commission appointed an administrator, nominated by the state government, to manage the company.

The state government has appointed S C Mohapatra, managing director of OMFED, as the CEO of Cesco undertakings.

Mohapatra took charge of Cesco in addition to his present assignment shortly after OERC passed its order.

The order of the commission came in view of the imminent breakdown in power supply following Cesco Employees' Association threat to go on strike from September 5 and AES authorities' decision to abandon the distribution business thus breaching contractual obligations.

Last week the OERC admitted a case against the American power giant AES-managed Cesco. A two member bench of the OERC comprising H S Sahu and B C Jena took cognizance of Gridco's charges and observed that there are sufficient grounds to proceed against Cesco under the OERC Act for 'abjuring its obligations'.

According to OERC, the breakdown of power supply in the Cesco area is imminent. There is no evidence that Cesco has taken or has any intention to take effective measures to prevent the impending breakdown of power supply.

The commission has further directed the CEO to constituting of persons as he deems fit to assist him in the day to day management of the company. The Cesco board will remain in suspended animation till further orders.

The commission also observed that Cesco, by asking the former to stop power supply in view of its bankruptcy, has committed a fundamental breach in the licence condition.

The commission viewed critically the utility's non-committal attitude to pay salary to its staff and closure of the centralised billing system which is going to seriously affect the revenue collection.

Gridco had brought to the notice of the OERC the Cesco managing director Roberto Podesta's letter to Gridco chairman asking the Gridco not to supply power in view of the precarious financial condition of Cesco.

Gridco counsel said that the licensee had behaved in most irresponsible manner knowing full well the consequences.

However, the commission has allowed time to AES till September 27 to explain why penal action should not be initiated and its licence revoked.

AES owns 51 per cent share in Cesco, while Gridco, a government of Orissa company has only 39 per cent and is solely in charge of power transmission.

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