64560 INDIA: ORGANIZATIONAL TRANSFORMATION AND PUBLIC PRIVATE PARTNERSHIPS: MAHARASHTRA STATE ELECTRICITY TRANSMISSION COMPANY LIMITED (MSETCL) OUTCOMES FROM THE CAPACITY BUILDING INITIATIVE September 2010 1. Background: Maharashtra State Electricity Transmission Company Limited (MSETCL) was created in 2005 as a part of the unbundling exercise of the vertically integrated state power utility. As a deemed transmission licensee in the state, MSETCL is required to provide reliable and efficient transmission services within the state. It also discharges the State Transmission Utility (STU) functions that require MSETCL to undertake planning, monitoring and coordination related to the development and operation of the intra-state transmission system and facilitate open access through the state transmission system. MSETCL manages a network with a transmission capacity of over 66,118 MVA and over 36,000 km of transmission lines. It is also the only state transmission utility in the country that operates and maintains an HVDC line (500kV, 3582 MVA, 1504 circuit km). Over the last decade, Maharashtra has been facing a large demand-supply gap in the power sector, a cause of constrained industrial growth of the state and a source of discontent among users, due to a shortage of generation capacity and existing constraints in the transmission and sub-transmission systems. MSETCL served a peak load demand of 13,575 MW in 2007-08 and still faced a peak power shortage of more than 26%. To bridge this gap, the Government of Maharashtra plans to almost double the generation capacity to nearly 32,305 MW, necessitating a corresponding increase in transmission infrastructure of MSETCL that has an overall investment requirement of US$ 3.5 billion (Rs 16,000 crore) over a period of 5 years. The government initially approached the World Bank in 2006 for extending support to MSETCL. The scale of the challenge faced by MSETCL was immense. Despite its recent corporatization, MSETCL lacked necessary systems and skills essential for achieving the objectives set before it by the government - to scale up its annual investment program from its typical US$ 100 million per year, to US$ 1 billion per year for each of the next four years. It was against this background that the Bank-MSETCL partnership for change was launched in 2006. The following flowchart describes the evolution of Bank’s engagement with MSETCL. 1 Phase I (2006) Phase II (2007) Phase III (2009) (PPIAF Funding) (PPIAF Funding) (ESMAP & AUSAid Funding) Developing Business Implementation of Strategic Alliance Model Capacity Building Initiatives for Plan & exploring (SAM) MSETCL PPP options Framework for SAM for $1.5 bn investment was Bank support designed with following features: included: • EPC partners selected through open To ensure that the projects got • Demand growth competitive bidding to implement a bundle of implemented as designed and assessment to new schemes over next 4 years MSETCL exercises adequate prioritize $4 bn • Each partner to be responsible for detailed supervision of all projects and investments design, engineering and implementation of its contractors. • Assessment of assigned projects MSETCL’s • Innovative risk sharing through performance MSETCL needed to reorganize its implementation based platform processes and review deployment capacity • Incentives for early completion included of its human resources • Exploring options for Public-Private • Participation of globally-reputed vendors at Partnership (PPP) costs lower than MSETCL’s internal estimates Assisted MSETCL to strengthen its (expected to save $100 mn) institutional capacity for • Development of • MSETCL moves from ‘project execution’ to managing large turnkey contracts, business plan ‘project management’ company implementing policies to • Strategic Alliance • Involved major changes in business processes strengthen its own human Model as a possible and hierarchies in the company (especially resources & building sustainable PPP option Projects, Finance and Human Resource) change management practices In parallel, a loan (US$ 50 million) under the joint IBRD-IFC Sub-National Financing was processed. Also, there is an ongoing dialogue to provide possible support for partial listing of MSETCL Under the first phase (2006) the Bank launched its engagement with MSETCL under a PPIAF1-funded business planning exercise under which MSETCL developed their business plan and organizational structure to implement the required US$ 4 billion transmission investment program. In the second phase (2007), under a World Bank administered PPIAF grant, MSETCL designed a framework for implementing the ‘Strategic Alliance Approach’ for initial investments of US$ 1.5 billion. Under this approach, vendors (Strategic Alliance Partners) were selected through open competitive bidding, to assist MSETCL in implementing a bundle of new projects proposed to be undertaken over the next four years. This model has a number of unique features, like developing business partners committed to the infrastructure growth of the company; ensuring fast-track project implementation by avoiding multiple tenders and building incentives for early completion in contract conditions; bringing private sector efficiency and expertise to MSETCL thus enabling the company to imbibe a more business-like culture; adoption of ‘alliance’ approach with vendors as opposed to the more traditional, rather adversarial, tight- control relationship. Refer Annex 1 for further details on the model. Meanwhile, a parallel dialogue was initiated, focused on transitioning MSETCL from traditional sources of financing and preparing for commercial financing. A joint team from the sub-national department of International Finance Corporation (IFC) and the World Bank prepared a loan of US $50 million without any state guarantees. As part of the loan support, recommendations were made for improving corporate governance practices and developing a framework for dealing with environment and social issues. This loan, the first such of the sub-national department in South Asia, was committed in September 2009. 1 The Public-Private Infrastructure Advisory Facility (PPIAF) is a multi-donor technical assistance facility, aimed at helping developing countries improve the quality of their infrastructure through private sector involvement. PPIAF is owned and directed by participating donors, which include bilateral and multilateral development agencies and international financial institutions. 2 The above initiatives involved major changes in business processes and structures within the organization. The next key challenge was to ensure that the projects being executed under the Strategic Alliance Model got implemented as designed and MSETCL was able to exercise adequate supervision of all projects and vendors. For this, MSETCL needed to reorganize its processes and review deployment of its human resources. The business re-engineering and institutional capacity strengthening process was started with support from the World Bank through an Energy Sector Management Assistance Program (ESMAP)2 and AusAID3 funded technical assistance project, commonly called 'Organizational Transformation and Capacity Building in MSETCL'. The initial focus under this program was on assisting MSETCL strengthen its institutional capacity for managing large turn-key contracts, implementing policies to strengthen its human resources and building sustainable change management practices by benchmarking against the most efficient international utilities and on preparing a pre-IPO and Public Private Partnership (PPP) framework. The benchmarking was carried out against the national transmission utility in India - Powergrid, which is considered advanced by international standards. The assignment was started with the expectation that a set of recommendations related to institutional strengthening would be prepared and implemented by MSETCL in a phased manner. However, due to the large scale buy-in of the proposed arrangements, the implementation started concomitantly with the study. Hence, focus shifted to implementation of institutional strengthening and the pre-IPO support activities were not undertaken. The PPP framework (Strategic Alliance Model implementation) was developed as a part of the institutional strengthening activities. The present note seeks to summarize activities undertaken under this Technical Assistance program. 2. Objective of the Note: The objective of this note is mainly summarizing the activities undertaken under the TA program. This note also seeks to share the experience of Maharashtra in undertaking fast track transmission infrastructure development through a well formulated Strategic Alliance Approach and putting in place improved business processes/organizational structures, to effectively implement this approach, with other states/stakeholders in the country. This dissemination is expected to motivate other power sector state utilities to appreciate the usefulness of the capacity building exercise as a means to bring about organizational transformation required for infrastructure scale up and to meet the market challenges arising from the current open access scenario in the power sector. 3. Outputs and Outcomes: The detailed methodology followed in conducting this assignment is attached at Annex 2. Several meetings, workshops and field visits were conducted for dissemination of proposed changes and obtaining feedback on process changes contemplated, which resulted in better design and implementation of the recommended process changes. Details of such meetings, field visits and workshops are attached as Annex 3. The specific outputs that were delivered to MSETCL and their outcomes are discussed below: 3.1 Process Re-engineering: 2 ESMAP - The Energy Sector Management Assistance Program - a global knowledge and technical assistance partnership administered by the World Bank and sponsored by official bilateral donors - assists low and middle-income countries (ESMAP’s clients) to increase know-how and institutional capacity to achieve environmentally sustainable energy solutions for poverty reduction and economic growth. 3 AusAID - The Australian Government agency responsible for managing Australia's overseas aid program. The objective of the aid program is to assist developing countries reduce poverty and achieve sustainable development, in line with Australia's national interest. 3 3.1.1 Re-engineering of Business Processes: Revised Process maps were developed for Finance, HR and Projects (project implementation at field level, bill processing at field level and contract management at Corporate Office). 3.1.2 Formulation of Model Work Schedules: These help in monitoring and planning the work components and were developed for Transmission Lines, Sub-stations and Bay extension works. Specific sub-activities, their time schedule and dependencies were detailed. 3.1.3 Formulation of Addendum to Project Implementation Agreement: This was developed as a support document to the implementation agreement required to be followed by the Contractor and specifies detailed arrangements applicable to the following areas:  Project Monitoring Framework  Inspection & Quality Plan  Contractor’s Organization Structure  Sub-contractor Quality check & Equipment Drawings approval. 3.1.4 ‘Project Execution’ to ‘Project Management’ Company: The modified business processes took into account the shift in the focus of the utility. MSETCL moved from a ‘project execution’ to a ‘project management’ approach with the introduction of the strategic alliance model. 3.2 Strengthening Human Resources: 3.2.1 Revised Organizational Structure: These were recommended for Finance (main emphasis on separation of Accounting, Finance and Audit functions), HR (separation of Administrative, Establishment and Human Resource Development functions) and Projects (setting up of Project Monitoring Team, creation of dedicated civil sub-division for EPC contracts, setting up of separate contract/design & inspection/project implementation/scheme approval verticals). The restructuring of Projects department has been implemented while that of HR has started. In case of Finance, it has been decided that the re-structuring will be implemented when additional man-power becomes available. 3.2.2 Preparation of job descriptions for Projects, O&M, HR and F&A (Corporate and field level): MSETCL did not have readily available job descriptions. These were developed through one-on-one meetings with all unique roles in the organization. The draft was validated and updated with comments received from the management and job-holders. MSETCL is expected to use this for recruitments, training and lateral movement of staff. It will also help the staff to have clarity on their role in the Company and managers to assess suitability of staff. 3.2.3 Manpower Planning: A manpower planning exercise had been undertaken by MSETCL in 2007. As a part of this exercise, man power norms for all departments, except projects, were reviewed. The man power norms for projects (including civil department) were reviewed under the present assignment and a revised structure was recommended that resulted in an increase in the number of posts. To ensure that the recommended man power norms do not result in a surplus pool of employees after projects have been commissioned, the O&M requirements were also reviewed taking into account the new assets being created. It was found that project man power was less than that which would be required for O&M. The man power recommendations were subsequently approved by MSETCL and recruitments are under process. 4 3.2.4 Training and Development: A Competency Model was developed and based on this the Training and Development framework was prepared. This included development of a Training Policy Manual which formed the basis for identification of training needs at various levels of the organization. The training programs were reviewed and new programs added to the list of Induction and Refresher courses. A list of training institutes was also compiled. 3.3 Performance Management System: 3.3.1 Performance Management System: MSETCL originally followed a system of Annual Confidential Reports (ACRs) system. Under this system, the employees were rated based on Key Performance Indicators (KPIs) identified during performance planning meetings. The ratings were subjective to a large extant and the process was confidential. To improve this process, a Performance Based Appraisal System was recommended. The PMS involves performance appraisal based on assessment of performance in Key Result Areas (KRAs) against the KPIs in Projects, Operations, Finance and Human Resource departments. The relevant PAS Design Manual and PAS forms were submitted to MSETCL Board. The system has been partially adopted during 2009-2010. It is expected to be fully integrated as a normal business process from the year 2010-11 onwards.4 3.3.2 Design of Rewards and Incentives: As of now, no structured rewards and incentive system is in place in MSETCL. A two tiered rewards structure has been recommended – it includes appointment of a Zonal Award Committee in each zone and a Corporate Office Award Committee. The criteria for evaluation of performance have also been suggested. 3.3.3 Career and Succession Planning Matrix: This has been developed based on the Competency Model. The matrix helps to identify the competency requirements for critical jobs, assess candidate competency, evaluate possible job-personnel matches and also plan training in advance to develop the required competency for undertaking efficient succession planning. It is also a tool for career planning of individuals. 4. Key Lessons Learnt: The assignment has re-affirmed that in the Indian power sector, while the policy framework and regulatory infrastructure is in place, the real challenge lies in its effective implementation. This manifests from the rigidity in the legacy processes that have been existing in such organizations since their inception - limited application of information technology, lack of coordination at the senior management level, centralization of powers and most important of all, the mind set and perspective of the employees. For change to be acceptable and owned internally, an exhaustive ‘as-is’ analysis of processes and their inadequacies need to be addressed in-house through internal teams. In addition, an awareness of the prevailing socio-political environment is also necessary. To fine tune the proposed processes and bring about acceptability from the stakeholders, a thorough and intensive dialogue and constant feedback process needs to be initiated within the organization with the due approval of the senior management (Board of Directors). This should be followed by assisting the organization in implementation of the proposed changes. The most significant aspect of this NLTA is the large scale organizational re-structuring carried out in Projects department of MSETCL and start of implementation of revised business processes during the tenure of 4 These reforms have resulted in changes at ground level. The team received feedback from the Executive Director/Human Resources that the new practices were percolating down the organization. There is a palpable excitement and genuine enthusiasm among staff to meet the performance levels defined through the new Key Result Area (KRA)/Key Performance Indicator (KPI) based Performance Appraisal System. It has also been reported that a pro-active dialogue now regularly happens in project review meetings about constraints in achieving KRAs and how to overcome them. 5 the assignment. The remarkable aspect is that it was possible to do this without any significant resistance from the employee unions. With this background, the key lessons learnt from the NLTA that will be useful for future engagements are summarized below: 4.1 Sector Restructuring can be used as a tool for organizational reform: Unbundling provided greater autonomy to MSETCL management and was an opportunity to undertake organizational re- structuring and review of its internal business processes. This demonstrates that unbundling can be used as an opportunity for initiating internal transformational change in the utility. 4.2 Comprehensive Study of „as-is‟ scenario and historical/circumstantial aspects is necessary before attempting organizational re-structuring: It is necessary to study the internal processes of the organization thoroughly and appreciate the overall constraints of the political economy within which a state government company functions, before designing the revised business processes because there is no single, readymade solution applicable to all organizations. 4.3 Internal change management needs to be handled through a few „key change drivers‟ in the organization: These individuals are generally self-motivated and forward looking and they are present in most organizations. It is important to identify them and get them involved in the change process as they will be effective in catalyzing changes within their sphere of influence. 4.4 Participative Process is effective in building consensus: A significant feature of the change process in MSETCL was the extensive consultation process followed at every stage and across all levels of the organization. This resulted in the sense of ownership being transferred to MSETCL and contributed significantly to the smooth implementation of organizational restructuring. Holding workshops to gather employee feedback, followed by dissemination workshops of the planned changes by the senior management, responding to employee queries at each stage, helped in strengthening the change process. 4.5 Make distinction between “Desirable� and “Doable�: MSETCL tried to make this trade-off by judiciously identifying areas where change was possible and not picking on those departments/areas where there was resistance, as this would have derailed the entire change process. For instance, the full implementation of the Performance Appraisal System (PAS) has been deferred to the following year to allow the employees to get accustomed to the new way of evaluation against KPIs. Incentive scheme implementation has also been postponed to future and only rewards system has been implemented. 4.6 Change is an Evolutionary process, hence there is need for flexibility and gradual implementation: MSETCL adopted a phased approach to tackle the issue of capacity building and institutional strengthening. It started in 2006 with a stock taking exercise and continued on to the formulation of the strategic alliance approach to address the immediate need to expand infrastructure. The extensive internal consultations and attention to feedback has helped in developing employee confidence to take on greater challenges. It is expected that the change process in MSETCL will continue and the company will eventually evolve into a fully fledged business entity. 4.7 Multi-tier, multi-functional Internal Structure is required for achieving transformation: MSETCL adopted a three-tier internal structure for a quick and seamless adoption of the transformative changes contemplated within the organization. This structure had a Project Steering Committee constituted from the top level management (first level), a core cross functional team that had champions from all the core functions of the organization to facilitate inter-departmental communication across various levels (second level) and the core team from the relevant department that worked full time to implement the changes (third level). This structure resulted into in-depth consultations across the organization, took into account the feedback of the employees at various levels, generated buy-in amongst the staff, and hence resulted in smoother implementation of the proposed changes. 6 The approach adopted for MSETCL holds promise for organizations involved in scaling up of operations by even up to ten-times of their historical asset base by addressing the ‘how’ of implementation since the ‘what’ has already been defined. In state-owned enterprises, the key challenge is how to bring changes that are sustainable over a longer period of time and persist beyond the tenure of key individuals. Partial listing and commercial financing are a means to induce external party monitoring. In line with this, MSETCL is now considering a possible Bond/Initial Public Offer (IPO) issue which was not undertaken previously. This is another significant step forward in their journey of transformation. It is expected to result into further improvements in the corporate governance practices of the company. 7 Annex 1: The Strategic Alliance Model The Strategic Alliance Model hinges on attracting large and technically competent vendors for fast track implementation of an ambitious investment program. It provides for innovative risk sharing through a performance based platform. Under this approach, instead of inviting separate bids for each project in the traditional way, turn-key vendors (Strategic Alliance Partners), are selected through open competitive bidding, to implement a bundle of new projects proposed to be undertaken over the next four to five years. Each of the Partners is responsible for the detailed design, engineering and implementation of the assigned projects. Adoption of the Strategic Alliance Model involved forging a fundamental cultural change at MSETCL – MSETCL was accustomed to either executing all investments in-house or through a rather adversarial, tight-control relationship with vendors. The company transitioned to an ‘alliance’ approach, with inbuilt incentives for both MSETCL and the vendor to co-operate. Incentives for early completion were introduced and the concept of sharing savings in project costs between MSETCL and vendors introduced. The objective was to make project implementation more efficient, thereby achieving lower costs, a less cumbersome tendering process, faster execution and the development of technical and project management skills within the company. Under this approach, MSETCL was able to attract globally-reputed transmission vendors to take up contracts worth around US $1.5 billion in May 2009, at costs lower than MSETCL’s internal estimates. The contracts are expected to save MSETCL U$100 million compared with their internal cost estimates. The strategic alliance approach has a number of unique features like – developing business partners committed to the infrastructure growth of the company; ensuring fast-track project implementation by avoiding multiple tenders and building incentives for early completion in contract conditions; adoption of ‘alliance’ approach with vendors as opposed to the traditional tight-control relationship; and bringing private sector efficiency and expertise to MSETCL thus enabling the company to imbibe a more business-like culture. Effective implementation of the strategic alliance approach requires institutionalization of a Project Monitoring & Review Process within the company and implementing a well defined Strategic Communication Framework between the vendor and various departments of the organization at both corporate and field level. This may involve major changes in business processes and hierarchies within the organization. Existing roles may have to be re-aligned and new roles created to manage the new business processes. MSETCL achieved this seamlessly with buy-in from all cadres, right from management to field staff. It demonstrates the commitment of MSETCL to rise to the challenge of changing from being a monopoly to one of the players in an increasingly competitive market environment. 8 Annex 2: Methodology for the Assignment The following methodology was followed to implement the capacity building and organizational transformation exercise: 1. Analyzing the organization by conducting an ‘As-is’ study and mapping the existing Business Processes: The Consultant conducted 30 initial meetings with all Directors, Executive Directors, Chief Engineers and Human Resources (HR) team at the Corporate Office to understand current and future organizational challenges and issues. This was followed up with field visits to Aurangabad, Amravati and Nagpur 5 covering over 160 employees across all levels. All existing processes for Projects, Operations and Maintenance (O&M), Human Resources (HR) and Finance and Accounts (F&A) in the corporate and field offices were studied and analyzed for their effectiveness in meeting the organizational goals. Based on this, gaps in processes were identified. Individual discussions were carried out with executives in Corporate Office and key personnel in field offices to identify structural issues and implications of change in processes. Job Descriptions (JDs) were prepared and validated for all unique roles in MSETCL through a meeting with the job holders in Nagpur. Details of all currently operating training initiatives and programs were collected and gaps analyzed. The findings of this ‘as-is’ exercise, bringing out concerns, issues and gaps in various functions, was presented to the management of MSETCL during an Inception Meeting. An Inception Report was submitted after taking into account the views expressed in this meeting. This report formed the framework for the rest of the assignment. 2. Benchmarking and Business Process Reengineering: Since MSETCL had adopted a new ‘Strategic Alliance Approach’ for project execution, the Projects and Finance processes were required to be reviewed on priority. Nagpur zone was selected as the pilot zone considering the variety and volume of projects in this zone. A series of workshops and meetings were conducted to:  Identify key issues and challenges in project implementation  Study processes followed by Power Grid Corporation of India Limited, the Central Transmission Utility of India  Analyze post-award activities through a workshop with all stakeholders (MSETCL employees, contractors etc)  Present the proposed key process changes to MSETCL management (as an outcome of this discussion a focus group was nominated in MSETCL to implement the changed processes)  Finalize and incorporate process for post-bid discussions with contractors (the Consultant that had formulated the Strategic Alliance Approach was a part of these meetings)  Finalize Implementation Agreement Addendum for EPC contracts  Disseminate information on the proposed processes, manpower structure and obtain feedback - this was done by organizing a series of Communication Workshops at Pune, Aurangabad and Nagpur, where the reengineered business processes, structures and roles were presented by MD and Director/Projects to the employees. Over 350 field level executives participated from 7 zones. A similar workshop was also held at Washi for all construction and civil related staff. 5 MSETCL has seven operating zones – Pune, Washi, Nagpur, Amravati, Aurangabad, Karad, and Nashik 9 3. Organization Restructuring: A revised organizational structure was proposed based on the reengineered business processes. The key recommendation was to create a dedicated Project Monitoring Team within the Projects department that also houses a dedicated financial monitoring team. This team is currently functional and effective. In finance department, bill processing for EPC contracts was recommended to be carried out in the field offices instead of at Corporate Office, to increase their accountability. This decentralization was recommended to expedite payments. 4. Monitoring and Evaluation Framework: This was a critical area, particularly in projects and finance departments, given the size of the investment program and the time frame for its implementation. Three levels of review meetings were proposed for Project Departments – Divisional Level–conducted fortnightly by the Superintending Engineer (SE), Project Monitoring Meeting–conducted monthly by Director/Projects and Monthly Review Meeting – conducted by MD to begin with, and later to be merged with the Project Monitoring Meeting. Standard templates were designed for generating progress reports for these meetings. In addition, the Key Result Areas (KRAs) and Key Performance Indicators (KPIs) were formulated for reviewing organizational performance. Under the normal business scenario, in the long run, the departmental KRAs and KPIs would be decided by the top management of the company during annual business planning meetings. KPIs were also finalized for HR department. 5. Human Resource Development: This was reviewed under the following three areas:  The existing Performance Management System (PMS) of MSETCL was analyzed and a Performance Based Appraisal System (PAS) was recommended after discussions with all Heads of Departments (HODs) and Directors. This included finalizing individual KRAs/KPIs with Projects, O&M, Finance and Human Resources departments and obtaining MD’s approval. The KRAs and KPIs were also incorporated into job descriptions.  Rewards and Incentives scheme was designed. It has been recommended that, to begin with, a rewards scheme may be implemented and gradually transition this into an incentive scheme.  A Competency Model was developed for each job description- based on this, the Training and Development framework was designed. This framework included development of a Training Policy Manual, identification of training needs, preparation of a Training Calendar, process of selection for training, Training Delivery and Training Evaluation. 6. Succession and Planning Framework: This was developed based on the Competency Model. A grid of career and succession planning has been developed through which possible cross- functional movement of employees can be identified. This is expected to build capability across the organization, over a period of time. 10 Annex 3: Details of Field Visits/Meetings/Workshops DETAILS OF IMPLEMENTATION WORKSHOPS/FIELD VISITS/MEETINGS Date Description 16 & 17 Mar 09 HR Structure: Workshop for members of HR Department on transition of HR department from Administration to Human Resource Development and proposed HR Structure Series of meetings with MSETCL Management – MD and Projects Department to discuss role of Chief Engineer (CE) and Projects Department Structure Jun 09 Projects: All structures and roles were presented to Chairman, MD and Director (Projects) and to field offices through workshops/presentations along with the Processes. Multiple field visits to various offices in Nagpur zone (pilot zone) to discuss and communicate Apr – Jun 2009 the proposed changes Projects: Workshop for Projects department to address key issues faced and sharing of 18 Apr 2009 relevant processes followed by POWERGRID 25 & 26 May Projects: 2 Day workshop on proposed processes, structure & manpower at Nagpur 2009 Projects: Workshop on Process Reengineering for Projects for all Post Award activities 30 May 2009 conducted at Corporate Office, considering that the EPC projects were to be awarded shortly Projects/Finance: Presentation to MSETCL Management & World Bank on key process 5 Jun 2009 changes proposed in Projects and Finance. Projects: Workshops/meetings with MSETCL and the Consultants who had developed the 15 – 18 Jun 2009 Strategic Alliance Model, to finalise and incorporate processes for post bid discussions with contractors. Projects: Post bid discussions and Implementation Agreement Addendum with Strategic 19 – 20 Jun 2009 Alliance Partners prepared by Consultants Projects: Workshops at Pune, Auranagabad and Nagpur covering over 350 employees 10 – 14 Jul 2009 across 7 Zones by MSETCL (MD & Director/Projects) where Consultants presented proposed re-engineered processes, organization structures and revised roles for the effective implementation of the Strategic Alliance Model. Presentation of HR Structure to then MD (Mr Sanjay Sethi IAS), ED (HR) and rest of HR 16 & 17 Jul 09 Department in Corporate Office Report on Proposed HR Structure with roles defined through Job Descriptions and Review 7 Aug 09 Mechanism for HR submitted to ED (HR) Presentation of Finance Structure to then MD (Mr Sanjay Sethi IAS), Director (Finance) and 7 & 11 Aug 09 rest of Finance Department in Corporate Office Presentation of Finance Structure to new MD (Mr Arvind Singh IAS), Director (Finance) and 23 Sep 09 MSETCL Management Presentation of HR Structure to new MD (Mr Arvind Singh IAS), ED (HR) and MSETCL 23 Sep 09 Management Projects: Dissemination Workshop at Washi Zone covering all construction and civil related 21 – 22 Oct 2009 staff on proposed changes Finance: Workshop conducted for Director (Finance) the Corporate Finance Team and the 17 Nov 2009 Zonal AGMs from the field on the proposed new processes and their implications on the financial processes and the new Financial Project Monitoring Team Projects: Hands – on 3 day workshop conducted for the newly formed Corporate Project 18 – 20 Nov 2009 Monitoring Team (PMT) to train them on Project Monitoring processes and to familiarize them to their new roles Projects / Finance: 2 Workshops for the 5 Strategic Alliance Partners to familiarize them with Nov 2009 the new processes, introduce them to Project Monitoring Team (PMT) and to address their concerns 11 DETAILS OF IMPLEMENTATION WORKSHOPS/FIELD VISITS/MEETINGS Date Description Projects / Finance: 2 workshops conducted for field Executive Engineers (Construction & 3 & 4 Dec 2009 Civil) (EEs) on new processes covering their roles, the role of the Project Monitoring Team (PMT) and the responsibilities of the EPC Partners. MD & Director/Projects were also present. 2 day interaction between field Superintending Engineers (SEs) and EEs (Construction & Civil) and respective counterparts at the package level from EPC Partners coordinated by PMT to clarify concerns/queries, define terms on zero date, work completion etc. and to finalise the 15 & 16 Dec 2009 zero dates for the schemes for which work orders had been issued. Director/Projects communicated the necessity to adhere to the detailed work schedule and to define the billing schedule to process bills efficiently Proposed Manning norms for Field Offices related to Projects – Construction, Civil and testing 15 - 16 Dec 09 circulated to all Field offices for feedback. Meeting with office bearers of Subordinate Engineers Association to discuss proposed Field 15 Jan 10 Manning Norms Proposed Manning Norms presented to MD, Functional Directors, EDs and all CEs from the 22 Jan 10 Zones 5 Feb 10 Manning Norms and Implications on total Manpower presented to Board of MSETCL. Finance: Workshop was conducted for the Managers (Finance & Accounts) & Deputy Managers (F&A) from the Construction & Civil Circle and Division offices on the proposed 9 & 11 Feb 2010 new processes. The Activity Completion Certificates and the Fortnightly Review Templates were also shared with them. Mr Raghavan, retired Auditor General currently working as a retainee with MSETCL approved of the new processes from an Audit perspective Field Finance Structure: Changes in roles presented to Director (Finance), Chief General Managers (CGMs) & Field Senior Managers, Managers, Deputy Managers in F&A. 9 & 11 Feb 10 The Finance Monitoring Team played a significant role in communication of processes to the field. Projects: 1st Monthly Review Meeting for EPC Partners successfully conducted as per Project Monitoring Framework by MSETCL – All Schemes were reviewed and gaps identified. The key focus of this review meeting was to ensure that status of projects was obtained across all 18 Feb 2010 schemes. Several issues around Land Acquisition, amendments in Work Orders etc were taken up and resolved. The Consultant worked closely with the PMT and the field personnel to gather data and analyse it Workshop conducted for proposed HR Structure for the HR Department. A similar workshop 18 & 19 Mar 10 was conducted on the second day for the Field personnel as requested by ED (HR). Staffing Norms in the Field for HR personnel were also clarified. Projects: 2nd Monthly Review Meeting for EPC Partners successfully conducted as per Project Monitoring Framework by MSETCL – All Schemes were reviewed and gaps identified. Consultant found that by this meeting the PMT was well equipped to gather data on its own 19 Mar 2010 and to directly interact with Field personnel and the Strategic Alliance Partners. Hence the meeting focussed on only the critical issues. Drawing Approvals and Field level issues were already resolved. Pending issues related to Work Order amendments, Price Variation clause changes etc. Projects: 3rd Monthly Review Meeting for EPC Partners successfully conducted as per Project Monitoring Framework by MSETCL – All Schemes were reviewed and gaps identified. MSETCL’s PMT was completely equipped to manage the meeting without external support. However, some of the Strategic EPC Partners raised concerns on their ability to follow the 19 April 2010 clauses of the implementation agreement. The Consultant supported MSETCL in providing clarifications to the contractors after due discussions. Progressively, in the first 3 monthly review meetings, the quality of data from the field and their adherence to formats and timelines had significantly improved leading to efficient review at the MD & Director’s levels. 12 DETAILS OF IMPLEMENTATION WORKSHOPS/FIELD VISITS/MEETINGS Date Description Transition towards the new Finance Department Structure was approved and finalized during 22 Apr 10 the KPI Workshop. As the structure had been already finalized and approved, it may be noted that the financed department had already taken steps to transition towards the new structure. A 2 day training Program was conducted on Maintenance best practices for 35 participants 29 & 30 Apr from MSETCL (covering O&M field personnel) at the 400 KV Boisar Substation of PGCIL, 2010 covering all major substation and line equipment. 13