KSEB corporatising process clears hurdle

The process of corporatising the Kerala State Electricity Board (KSEB) as stipulated by the Electricity Act of 2003 cleared a major hurdle on Friday with most of the unions in the institution signing a tripartite agreement with the management and the State government on matters relating to benefits and service conditions of the employees.

The agreement commits with the KSEB and the State government to the setting up a pension fund (Rs.7,554 crore) for defraying the expenses on pension payments to retired employees. Sixty-five per cent of the fund would be raised by the corporatised KSEB and 35 per cent by the State government.

Bonds to be floated

The KSEB would float bonds to raise its share of the fund. The interest liability would be accounted as the company’s employee cost so as to be included in its future tariff petitions before the State Electricity Regulatory Commission for recovery from the power consumers. The government, on its part, would set apart the electricity duty being collected from the KSEB for nourishing the pension fund.

The employees’ concern was mainly about the fate of their pensions when the board transforms into a company. Their salaries, promotions, and other benefits would be protected as per the tripartite agreement.

The draft of the tripartite agreement was released by the government and the KSEB in October last, when the scheme for transferring all the assets, liabilities, and functions of the board to the corporatised entity was announced. The unions had been demanding certain changes in the draft. Accordingly, the agreement includes a commitment that the appointments in the company would be through the Kerala Public Service Commission.

The AITUC-affiliated union did not join the other unions in signing the agreement. Its leader, A.N. Rajan, said the union could not “betray the employees” because the fund proposed was “nothing more than an imaginary one and there could be no guarantee about future pensions.”

Leader of one of the INTUC-affiliated unions Sajeev Janardhanan, in a statement, described the agreement as “the best tripartite agreement signed by the employees of any of the State power utilities that had by now changed into corporatised entities.”