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Home News Power Sector News TNEB will be unbundled into two for transmission, distribution

TNEB will be unbundled into two for transmission, distribution

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TNEB will be unbundled into Generation and TransmissionThe Tamil Nadu Government passed an order on 08-10-2008 to unbundle the Tamil Nadu Electricity Board (TNEB) by splitting it into two entities. An order, issued by the Energy department stated that the holding company would be called the TNEB Limited and the subsidiaries would be known as the Tamil Nadu Transmission Corporation Limited (TANTRANSCO) and the Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO). All the companies would be fully owned by the Government.

The order said that a steering committee headed by Principal Secretary (Energy) will be constituted. The committee, comprising TNEB chairman and Principal Secretary (Finance) or his nominee, would finalise a scheme of transfer of assets and liabilities to the proposed entities in six months.

"The committee has been given six months' time to formulate a scheme to transfer assets and liabilities. Only then the unbundling will be done as per the government order. The TNEB chairman will be the chief of the two corporations as well,'' a TNEB source said. After six months, the final draft prepared by the committee will be submitted before the government.
As per the Electricity Act of 2003, all state electricity boards (SEB) engaged in transmission are banned from trading power. The boards will be the holding companies.

All SEBs should have undergone restructuring within a year of the act being passed. But the TNEB sought an extension from the Centre for four years, which was expired on 9th October 2008.

Last week, Electricity Minister Arcot N. Veeraswami held a meeting with the representatives of trade unions and ascertained their position on the issue of restructuring. As a matter of principle, the unions are against the idea of unbundling.

Indications are that the State will seek time for restructuring the TNEB till the panel gives its report. While communicating its decision to extend the deadline, the Union Power Ministry, in its letter of September 26, wanted Tamil Nadu to complete the process of separating the transmission function separately under a new corporate entity with a clear road map for further reorganisation of the Board soon thereafter.


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