A. Thillai Rajan

Abstract: From the early 1990s, dramatic changes have been taking place in the structure of Electricity Supply Industry (ESI) worldwide. The primary reasons for electricity sector reform has however, been different for industrialised and developing countries. The objective of this paper is to study and identify various factors leading to power sector reform in developing countries. The restructuring of Orissa State Electricity Board in India was used as a case study in identifying the various factors. The factors that result in implementation of restructuring are: (a) Contextual factors: They are the primary drivers for initiating reform. The performance of the utility and the conditionalities of the lending agencies are contextual factors. (b) Trigger factor: It is the determining factor that creates a compelling necessity to undergo restructuring. The inability of the government to continue to support the utility acts as the trigger factor. (c) Facilitating factors: They act as facilitators for initiating reform. Support of the government, absence of a powerful lobby, and the support of the top management are facilitating factors.

Abstract: Private financing of infrastructure projects is commonly seen in many countries today. In recent years, many private infrastructure projects have also attracted investment from Private Equity (PE) firms. Though there have been instances of PE investment in infrastructure even in the past, the growth has been substantial in recent years. This paper analyses the role of PE investments in infrastructure financing. The findings are based on an analysis of 2821 infrastructure projects that were announced during 1990–2009. It was found that projects with PE investment were larger when compared to projects that did not have PE investment, indicating that that PE investment helped in successfully financing larger projects. Our analysis also indicated that PE investment in infrastructure is more frequently seen in developed countries as compared to developing countries. In developing countries, the number of sponsors is higher in projects with PE investment without any corresponding increase in project size. This indicates that PE investors have helped in sharing the project risk among a larger group of investors, thereby reducing the risk faced by the individual sponsors.

Abstract: Venture Capital (VC) has emerged as the dominant source of finance for entrepreneurial and early stage businesses, and the Indian VC industry in particular has clocked the fastest growth rate globally. Academic literature reveals that VC funded companies show superior performance to non VC funded companies. However, given that venture capitalists (VCs) select and fund only the best companies, how much credit can they take for the performance of the companies they fund? Do the inherent characteristics of the firm result in superior performance or do VCs contribute to the performance of the portfolio company after they have entered the firm? A panel that comprised VCs, an entrepreneur and an academic debated these and other research questions on the inter-relationships between VC funding and portfolio firm performance. Most empirical literature indicates that the value addition effect dominates the selection effect in accounting for the superior performance of VC funded companies. The panel discussion indicates that the context as well as the experience of the General Partners in the VC firms can influence the way VCs contribute to the efficiency of their portfolio companies.

Abstract: Purpose – Public‐private partnerships (PPPs) are being frequently used today to private sector investment in road projects. Most of the road PPP projects are either for new roads or for those that involve significant expansion of existing capacity. There are limited instances of PPPs for renovating and maintenance of existing roads. The purpose of this paper is to highlight the applicability of using PPPs for road renovation and maintenance projects.Design/methodology/approach – This paper uses a case‐study approach since it is an appropriate strategy to investigate a phenomenon within its real life context. The East Coast Road project was chosen for the study because it was the first project in India to use PPP for road renovation and maintenance, and being the first project of its kind, the case was of general public interest.Findings – The paper indicates that risk levels in Rehabilitate, Improve, Maintain, Operate and Transfer (RIMOT) projects are lower than Greenfield BOT projects. Even in areas like...

Abstract: In the provision of basic infrastructure services to the urban poor, limited rigorous evidence on the most effective service delivery approaches is available. This meta-analysis synthesises the evidence on the effectiveness of bottom-up approaches that is characterized by the strong involvement of alternate service providers such as NGO's and CBO's in improving access to electricity, water supply, and sanitation services for the urban poor. Although bottom-up approaches are espoused, we find that they do not have a statistically significant effect. This trend was consistent for all dimensions of access: connectivity, affordability, adequacy, and effort and time. However, our findings also show that bottom-up approaches may be more effective in the water and sanitation sectors than in the electricity sector. When bottom-up approaches involve active participation from the community, the results are significantly positive. Our study suggests that innovations to bottom-up approaches that facilitate active community participation can be an effective way to increase access to basic services among the urban poor.

Abstract: This paper broadly follows the structure of the World Bank's Operational Guidance Note (OGN) for Public and Private Roles in the Supply of Electricity Services. Following the overview in chapter 1, the rest of chapter 2 sets out the techno-economic basis and the importance of political and institutional factors for reforming power markets in developing countries. Chapter 3 covers the current extent and outcomes of power market reform in developing countries. Chapter 4 covers enterprise restructuring and corporate governance, including the respective roles of state-owned enterprises and private enterprises in the provision of electricity services. Chapter 5 covers market structure, including restructuring power systems, the experience with independent power producers, and competition in the power market. Chapter 6 covers regulation of power markets. Chapter 7 covers ways that power market reform can support access and affordability to electricity services for the poor. The final chapter of the paper -- chapter 8 -- covers reform implementation, which complements the subjects covered by the OGN. The chapter covers three main aspects: (a) the challenges for implementing power market reform, including governments' roles and responsibilities in this endeavor; (b) the sequencing of power market reform; and (c) managing reform transition, especially the importance of starting conditions. The appendix to the paper examines the relevance of experience with power market reform in OECD countries for reform in developing countries.

Abstract: Power sector reforms in India were initiated at a juncture when the sector was plagued with commercial losses and burgeoning subsidy burden. Investment in the sector was not able to keep pace with growing demand for electricity. This paper takes stock of pre-reform situation in Indian power sector and identifies key concerns that led to initiation of the process of reform. The paper discusses major policy and regulatory changes undertaken since the early 1990s. The paper also illustrates changes in the market structure as we move along the reform process. We also discuss some of the major provisions of the recently enacted Electricity Act 2003 that aims to replace the prevailing acts which govern the functioning of the power sector in the country. In this context, we discuss two issues arising out of it, namely open access and multi-year tariff that we think would have a significant bearing on the performance of the sector in the near future. The paper also evaluates the reform process in the light of some of the regulatory changes undertaken. Finally, the paper briefly discusses the issues involved in introduction of competition in the power sector primarily through development of a market for bulk power.

Abstract: Ongoing theft, corruption, and an artificially decreased pricing structure have made it nearly impossible for the state utilities in India to improve power service As a result, industrial consumers across India exit the state-run system and rely on their own on-site power generation in order to ensure a consistent and reliable source of electricity The 2003 Electricity Act encourages further power production from these captive plants through its open access clause By encouraging the growth of these captive power plants, politicians in India set up a dual-track economy, whereby state-run and market-run production exist side-by-side This strategy allows politicians to encourage private sector involvement in the electricity market, without jeopardizing the support of key political constituencies at the state level

Abstract: This paper presents a framework for accessing comparative efficiencies of Indian State Owned Electric Utilities (SOEU), which have been mainly responsible for the generation, distribution and transmission of electricity in India. Performance of 26 utilities was evaluated using the non-parametric technique of Data Envelopment Analysis (DEA), and the impact of scale on the efficiency scores was also evaluated. The results indicate that the performance of several SOEUs is sub-optimal, suggesting the potential for significant cost reductions. Separate benchmarks were derived for possible reductions in employees’ number, and the results indicate that several utilities deploy a much larger number of employees than that required by a best practice utility, and significant savings are possible on this account. It was also found that the bigger utilities display greater inefficiencies and have distinct scale inefficiencies. Exploiting scale efficiencies by suitable restructuring and unbundling of SOEUs are therefore crucial measures that may foster efficiencies in the SOEUs. The paper discusses these results in the context of related policy issues.

Abstract: Deregulation and decentralization in the electricity sector have thrived worldwide since the early 1980s. China also started restructuring its electricity industry since the mid-1980s. The reform shares many common features with restructuring practices in other countries and exhibits some unique characteristics as well. To some extent, two features, namely governmental administrative departments' dual role of government and business inherited from a highly centralized planned economy, and the coal-intensive nature of power generation, has determined many aspects of the evolution of China's electric power sector. This paper aims to provide a comprehensive account of the process with some emphasis on recent developments. We also identify some of the features that are similar to electricity market reforms in other countries and, most importantly, those that characterize the uniqueness of the restructuring practices in China's electricity industry through investigating the administrative framework, price and investment mechanisms, and associated legislation and policy settings at each of the five stages in the evolution of the electric utility sector. The paper concludes with a discussion and summary of some generic characteristics and remaining challenges.