The Delhi Cabinet on Tuesday took a decision to merge two of its power generational companies into a single unit in order to streamline operations. Delhi Chief Minister Sheila Dikshit said in order to ensure better functioning of the generating unit, the Cabinet has decided to merge the Pragati Power Corporation Ltd. (PPCL) into the Indraprastha Power Generation Company Ltd. (IPGCL), thereby retaining the latter’s name. The step is seen as facilitating a better result-oriented approach.

All the employees of PPCL will become employees of IPGCL and will be governed by the rules and policies of IPGCL, she said. The new company will also take up renewable energy activities and will facilitate setting up of 220 kV GIS sub-station at Rajghat. This will happen after de-commissioning of the Rajghat plant.

Ms. Dikshit said the merger of the two companies will bring about a reduction in administrative, statutory and legal compliances. “There was no need to have two separate companies, when both were doing the same work, had the same employees and the same top management. We decided to merge the companies as it would streamline the process of running operations and save the additional work like filing the income tax and audits for two companies,” said an official from the Delhi Government’s Department of Power. The proposal will now be ratified by the Ministry of Corporate Affairs.

The report of the Comptroller and Auditor General of India for the year ended March 2012, which was tabled in the Delhi Assembly a week ago noted that both the PPCL and the IPGCL were among the eight State Public Sector Undertakings that were major contributors to profit. While the IPGCL earned profits of Rs. 397.14 crore, the PPCL earned Rs. 220.26 crore. The latter was also among the major recipients of budgetary outgo during the year 2011-12 of Rs. 400 crore in equity and Rs. 300 crore loan.

It may be recalled that the two generational companies were incorporated subsequent upon the re-bundling of the then Delhi Vidyut Board in 2002.

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