Kerala Cabinet on Wednesday gave clearance for corporatisation of the Kerala State Electricity Board (KSEB).
Accordingly, all assets and liabilities of the KSEB, now vested with the government (as a prelude to the corporatisation), will be transferred to a new company, named Kerala State Electricity Board Limited. The decision will be notified and a memorandum of understanding signed between the government and the board, represented by the Additional Chief Secretary (Power) and the chairman of the board respectively.
The Cabinet approved the arrangements suggested by a committee headed by the Chief Secretary regarding the original pension liabilities of the board till September 2011, totalling nearly Rs.7,584 crore. As per the arrangements, the new company is to form a special pension fund to meet existing and future pension liabilities. It is estimated that the pension fund needed for the period till March 31, 2009 is Rs.4,520 crore. Of this, Rs.1,600 crore will be granted by the government. The balance is to be made available from the new company. The full contribution to the fund will have to be made only in ten to 20 years.
The government, under the arrangements, will have to pay Rs.2,500 crore in ten years, including interest. This will be adjusted against the electricity duty due to the government, by retaining the duty collected with the board. The board will have to remit revenue surplus, after deducting interest payments on bonds issued by the board, and additional revenue realised from tariff revision to the pension fund.
The revision of salaries and pension after 2009 will result in increased pension liabilities. This will be shared by the government and the board in the ratio of 35.5: 64.5.
As the actual liabilities of the board could not be determined before the signing of the agreement, the determination of the liabilities till the date of signing the agreement would be done within a year. The Cabinet approved the proposal of the KSEB for adjustments to the pension fund in this regard.
The KSEB Officers’ Association protested against the government decision to convert the board into a company without taking the employees and officers into confidence. Association general secretary M. G. Sureshkumar said in a statement here that corporatisation of the board was quite significant for the public as well as the staff. The employees have aired their anxieties at the meetings held by the Chief Minister and the Power Minister. The government could not enter into an understanding with the employees organisations.
The Kerala Electricity Officers’ Federation urged the government to repeal the decision which would have far-reaching consequences in agriculture, industries and domestic sectors as well as the appointment and pension of employees. The decision was made without discussion in the Assembly.