This is a study of various Financial Restructuring Plans -prepared for facilitating turnaround of Rajasthan Power Distribution Companies (State Discoms). Its object is to identify reasons for their failure to financially improve to accomplish the break even. Financial Restructuring Plan (FRP) is an action Plan aimed at turning around the Power Distribution Companies, that sets out targets for various parameters viz distribution loss trajectory, average retail tariff increase, growth in consumers( including cap on release of agriculture consumers) and energy sales, return on equity, investment and financing plan ,reform transitional period (turn around period) along with requirements from the Power Companies, the Govt. of Rajasthan (GoR) and also the Govt. of India (GoI) in case it is involved in the formulation of the plan.
KEYWORDS: FRP, Power Distribution Company (Discom), Distribution Loss, Return on Equity.
Introduction Financial Restructuring Plan (FRP) is thus a dynamic document which derives its shape from the underlying premises taken for the reform transition period. It would need to be reworked from time to time, as and when, actual performance found to be at variance from the assumed scenario. It is thus a sort of ongoing plan. On March 21, 2000, GOR approved the provisional FRP of the State Power sector, same was finalized in August, 03. It was then revised in November,05 (first updation), then came the second updation in November- December, 11. Same was further revised in June,13 in an attempt to align the FRP (Nov.- Dec.,11) with the provisions of Central FRP,as formulated and approved by GOI in October,12. UDAY (Ujjawal Discom Assurance Yojna), a scheme for the financial turnaround of the Discoms approved by GOI in November,15, is the latest manifestation in this direction. Based on the approved provisional FRP (March, 2000), the Rajasthan Power Sector Reforms Transfer Scheme-2000 (Provisional Transfer Scheme) was notified on July 19, 2000. This led to restructuring the vertically integrated Rajasthan State Electricity Board (RSEB) in to following five successor companies for generation, transmission & distribution functions earlier performed by monolithic RSEB:
