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Outsourcing : A Business Imperative for the Power Sector
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Outsourcing : A Business Imperative for the Power Sector

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The power sector is going through a huge wave of change after electricity became a business post enactment of Electricity Act 2003.

The power sector is going through a huge wave of change after electricity became a business post enactment of Electricity Act 2003.

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  • 1. Indian SchooL of Petroleum & Energy [ISPe) along with University of Petroleum and Energy studies announces the 2nd Human Resource Round Table on Power. A brainstorming thought provoking platform to be held this year on Friday, September 21, 2012 in Delhi The Government of lndia wants a welliunctioning power market leading to free competition - rewarding more efficient generators and reducing power procurement cost. Major objectives of the Electricity Act, 2003 • Promote competitive procurement of electricity • Facilitate transparency and fairness In procurement processes • Transparency ensured by Guidelines & Standard Bid Documents for tariff based bidding • Enhance standardization and reduce ambiguity and lime for materialization of projects • Standardization of Bid documents, BId submission and evaluation process, lime Line for bidding process. tarill structure • Provide fleXibility to suppliers on internal operations white ensuring certainty on avaitabiLity of power and tariffs for buyers • Tariff to be quoted up-front for Life of plant and Regulator to adopt tanff arrived through transparent bidding process as speCified by Guidelines • Developer has flexibility to choose optimum unit configuration • Provides incentive to developer to adopt innovative financiaL modeling and tax planning to ensure competlhve tanff & return on investment In that regard after January 2011 the organizations going lor competitive bidding Will have to Inform the prices for nexl 25 years. Therefore If the organization has 10 remain competitive for Ihe / next 25 years they have to tie up With vendors in the vaLue chain to reduce cost and maintain operationaL efficiency. /
  • 2. Outsourcing in Generation, Transmission Major issues in outsourcing and Distribution • Selection of vendors: Successful completion of projects depends upon• Outsourcing EPC saves cost and time and makes the organization human resource of vendors and therefore power sector HR (generation, more competitive. ConstrucllOn companies like L&T, Lanco, DLF, transmission and dlstributionl has to select vendors based on their Tata, Gammon India. Hlndustan Construction Company, BHEL, human resource practices. Finding a mature partner is crucial for the Reliance Infra, Alsthom, BGR Energy, GMR, Siemens, GE etc. have success of outsourcing. There are vanous pallems lor evaluating the been associated with EPC of generation power plants. partner.• The EIA Notification. 2006 prescribes a time limit of 105 days from l. Outsourced funcllon or actMIy should be a core competency of the day of receipt of complete information for environmental the partner, as demonstrated by clearance. Environment duirance therefore is outsourced by power • expenence gener.t:ion compantes 10 orpniations for speedy cleillrillnces. II. Client and partner must share values, such as belief in• COill ~ndling ilnd nh disposal are conSidered cntlcal empowerment, if their employees are to environmental Issues It makes bUSiness sense for Power plants • wortc. together successfully and If the partner is to to focus attention on power generation and outsourced coal adequately represent the client handling and ash disposal responsibilities to contractors who specialize in these functions. Ill. Partnel" should be well-establJshed In Its IndUstry, as demonstrated by size, years of expenence, and financial stabllrty• Outsourcing wilter treatment plants make a good business sense for power sector companies. The delOniZatlon, softening, water • Cost of seMuVS quatityofcustOll"lel" services: Until now the utilities cooling. purification IS to be done while taking care of discharge have banked on outsourcing only lor decreaSing customer service compliance and waste reclaim. cost. However in a regulated enVIronment the utilities are momtored for mamtalnlng quality of customer selVlce as well. Therefore, it is• Boilers and turbine maintenance IS gIVen to specialized agencies. imperative for utilities to look beyond cost saving and create an The gas turbine maintenance is also outsourced, the high outsourcing arrangement to get more benefits like, enhancing pressure parts are taken from onglnal equipment manufacturer revenue. developing business process, achieVing break even etc. and the boiler and turbine maintenance IS given to This would Involve strategic partnenng WIth mature licensed agencies. outsourcing organizations.• The logistics and horticulture are the functions that are • Outsourcing within safety net: .Areas outsourced are WIthin the safety outsourced in power plants. Transportallon of coal and net like coal handling, ash handling, bitting etc. Third party will bear maintaining parks and gardens are not core functions in any the risk of technology obsolesce and therefore, IT is being outsourced power plant. Hence vendors bid for such functions. to an extent but strategic alliances are missing. • Broad vs single services: It is a constant challenge to outsource more and more to gain competitive advantage. However the companies Transmission and Distribution decide to either outsource the single services or the entire range. 95% of transmission lines are outsourced. The bidders bid for Services like meter to cash, Business process outsourcing are broad, 25 years for construction, root survey for transmission lines where as payroll coal handling etc. are Single services. and substation, Single service outsourcing is also known as operational outsourcing, In power distnbution meter reading, bill printing, meter which will eventually move towards broad outsourcing, also known as maintenance and meter replacement are outsourced. Diagnosing transactional outsourcing which is strategic and will result in a cable faulliocation is outsourced to specialized agencies. partnership-oriented, where company capabilities are incomplete. Participation is by invitation. For participation and invitation. please contact: ParamJyot Singh Mobile: 09953084360 Email: paramjyot@isp.co.1n For sponsorship opportunilies, please contact: V,ka5 Narula Mobile: 09810129071 Email: ~I kas n" ISP (0 In
  • 3. Conference Agenda September 21, 2012. TaJ Mihal Hotel, New Delhi Inaugural Session 9:30am Registration & Welcome Tea 10:15am Welcome Address Dr. Parag Diwan, Vice Chancellor, University of Petroleum & Energy Studies 10:3Dam Keynote Address Ashok Luasa, lAS., Additional Secretary, MInistry 01 Power, Govt. 01 India 11:0D.am Refreshment Break 11:30am SESSION 1: HR ISSUES IN OUTSOURCING A. Rabindranath, DIrector, Hay Group 12:15pm : CEO PANEL DISCUSSION Moderator: Subhash R. Sethi, Advisor, University 01 Petroleum & Energy Studies • Gopal Saxena, CEO, BSES Rajdhani Power ltd. • Janardan Kar, Managing Director, Chhatllsgarh State Power Generation Co. Ltd. • S.K Negi. Managmg Director, GUlara! Energy Transmission Corp. ltd. • Salish Sharma, President & CEO Hydro. Jindal Power ltd. • Shailendra Agarwal, CMD, Rajasthan Ralya Vidyut Prasaran Nigam ltd. • Rajeev Sharma, CMD, RuraL Electrification Corp. ltd. • Ashwani Kumar, President, Corporate DeveLopment, ReLiance Power ltd. • R.D. Gupta, Former Member, Uttar Pradesh ELectriCity Regulatory Commission 1:15pm lunch Break 2:00pm SESSION 2: GENERATION: COAL AND GAS BASED 3:00pm SESSION 3: ENGINEERING, PROCUREMENT AND CONSTRUCTION 3:30pm Refreshment Break 3:45pm SESSION 4: TRANSMISSION 4:15pm SESSION 5: DISTRIBUTION 5:15pm VALEDICTORY SESSION Vote of Thanks, 6:00pm • : Conference closure•l , •
  • 4. 2nd Power ‘HR Round Table’Friday, 21st September, 2012, Taj Mahal Hotel, New DelhiRegister now!4 easy ways to register:1 Fax: +91-11-41730154 2 Call: Paramjyot Singh, 09953084360 3 E-mail: paramjyot@isp.co.in4 Post: Send the completed registration form to: Power Sector ‘HR Round Table’ Secretariate, Indian School of Petroleum & Energy, 3rd Floor PHD House 4/2, Siri Institutional Area, August Kranti Marg, New Delhi - 110 016 REGISTRATION FORMPLEASE USE BLOCK CAPITALSCompany .........................................................................................................................................................................................................................................................Address .........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................Postcode ................................................................................................................... Country ..................................................................................................................Telephone ................................................................................................................. Fax ...........................................................................................................................Delegate 1: Delegate 2:Name (Mr./Ms./Dr.) ............................................................................................. Name (Mr./Ms./Dr.) .............................................................................................Designation .......................................................................................................... Designation ..........................................................................................................Department .......................................................................................................... Department ..........................................................................................................Mobile No. ............................................................................................................. Mobile No. .............................................................................................................Email ........................................................................................................................ Email ........................................................................................................................Delegate 3: Delegate 4:Name (Mr./Ms./Dr.) ............................................................................................. Name (Mr./Ms./Dr.) .............................................................................................Designation .......................................................................................................... Designation ..........................................................................................................Department .......................................................................................................... Department ..........................................................................................................Mobile No. ............................................................................................................. Mobile No. .............................................................................................................Email ........................................................................................................................ Email ........................................................................................................................Signature ............................................................................................................. I’m unable to attend the HR Round Table. Please send me the conference proceedings after the conference and also keep me inDate ........................................................................................................................ the mailing list. REGISTER NOW! FAX BACK THE FILLED FORM TO (011) 41730154

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