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Orissa prepares contingency plan for Cesco

Dillip Satapathy

The Orissa government has prepared a contingency plan to manage the Central Electricity Supply Company in the event of the US utility major AES Transpower pulling out of the company prematurely.

As per the scheme, the state government intends to approach the Orissa Electricity Regulatory Commission soon for the appointment of an administrator to manage Cesco if the AES-nominated managing director and directors of the company continue to remain absent from the headquarters for a prolonged period and do not look after the day-to-day functioning of the company.

The managing director and other AES-appointed directors of Cesco have not been coming to the office for nearly two weeks. This follows AES', which holds 51 per cent stake in Cesco, announcing its intention to pull out of the company and refusing to pay salary to the employees citing cash loss as the reason.

The non-payment of salary for July had created unrest among the employees forcing the government, which owns 49 per cent of Cesco through Grid Corporation to intervene to prevent any disruption in the power supply in the coastal districts.

A senior energy department official pointed out that AES wanted to pull out of Cesco immediately, but it could not do so because of the lock-in clause in the shareholders' agreement, which bound it to the company till March 2002.

But pending its formal exit, AES has virtually abandoned Cesco with its officials remaining absent from office for the most part of August. Fearing that such a situation will leave the employees directionless and affect the functioning of the company in the long run, the government proposes to appoint an administrator to manage Cesco's affairs until AES' shares are transferred to Gridco or any other party.

This contingency plan was discussed threadbare at a meeting of the senior energy department officials with Chief Minister Naveen Patnaik here last week. The government, sources said, would submit the proposal to OERC after the commission started functioning following the appointment of new members.

The government filled up the two vacant posts of OERC by appointing former CMD of Gridco BC Jena and principal accountant general of Kerala DP Sahoo as members. The new members are scheduled to take oath on Monday after which the chairman of the commission will be selected.

Meanwhile, the tense situation in Cesco owing to the employees' agitation has been eased to some extent with the drawing and disbursing officers of the company disbursing the July salary to the staff defying the directive of the managing director.

Though the money for the salary had been provided by the state government, AES was against disbursing the same as salary to the staff pending clarification by the government under what head it had provided the money.

In an office order, Cesco MD Roberto Podesta had instructed all his DDOs not to use the money given by the government until it was clear that it was a pure grant and not part of any receivable from the government.

In a separate letter to state energy secretary DN Padhi, Podesta had charged the state government with "interfering in the day-to-day management of Cesco" and said if the money given by the government was part of the World Bank loan or any pending receivable, using it for the payment of salary would violate the company's escrow agreement with Gridco.

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