State-run Power Grid Corporation is likely to be paid R81 crore for its equity in Posoco, a power system operations venture, which is going to be separated from it.
Posoco will now be a wholly-owned government company under the ministry of power. The ministry has moved a draft cabinet note to set up Posoco as an independent government company.
The Centre will have to pay PowerGrid only R30.64 crore towards the paid-up equity capital of Posoco (at par). The company will be paid another R50.57 crore ó R13.80 crore towards general reserves and R36.77 crore towards profits.
Posoco was created in March 2009 as a subsidiary of PowerGrid, following a government directive. The understanding was that if the entity is made independent later, PowerGrid would not be eligible to receive a premium for its equity in the entity. Posoco is mainly into the regulation and management of the grid, and it is not a main profit centre.
PowerGrid, however, is not exactly happy with the current proposal. ďThe separation of Posoco is happening only at the behest of private sector transmission players, who see our role in the management of grid operations as clashing with our prime operation of putting up transmission networks across the country,Ē said a PowerGrid official asking not to be named. With the tariff-based bidding system starting in the power transmission sector, several companies, including Sterlite and Reliance, have entered the sector.
Under the proposed structure, Posoco would be created as an independent government company that will have up to five functional directors on its board, including one chairman and managing director. The four directors would be for system operations, market operations, human resource and finance. In addition, there would be two government nominees and a requisite number of independent directors. In the revamp, all the existing posts, including those up to the board level, would be retained at their existing salary and allowances.
The government decided to carve out Posoco after last yearís grid collapse, which led to a blackout in most parts of the country after power failure in the northern, eastern and north-eastern