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JULY-SEPTEMBER, 2002VOL. 3
NO.3 Orissa paid Rs. 306 crore as fee for Rs.1,300 crore project ! The world bank - aided, sponsored, guided and implemented Orissa power sector reforms paid Rs.306 crores as consultancy fee rented for the projects which was divided into two phases: Pre and Post reforms. World Bank suggested a multi-disciplinary team of domestic and foreign consultants be appointed to assist the government in pushing through reforms. As per the agreement, payment to the consultants was to be made out of the 10 million-dollar World Bank loan and a 35 .5 pounds million grant from the U.K.’s department for international developments (DFID). In September 1994 an agreement was signed with KPMG –led consortium of international consultants which included National Economic Research Associates Inc (NERA) of the US, McKenna&Co of the UK and Monenco Agra Inc of Canada. Initially a grant of 12 Million pound from the ODA/DFRD financed the reform consultants and the institutional strengthening project (ISP) consultants. The former was responsible for the preparation of reform legislation, the regulatory framework, the transfer scheme and the financial basis of the disaggregated sector. The ISP consultants were to assist in the formation of the organistion structure, personnel policy, work practices and financial system of the erstwhile Orissa state electricity board and its successor entities alongwith staffing norms. DFID selected all the consultants. Price Waterhouse Coopers was engaged as the ISP consultant. McKenna (later on Cameron McKenna) to provide legal inputs and BZW (later on Credit Suisse First Boston (CSFB) to provide the merchant banking expertise, while Merz McLellan and Seaboard international were to provide engineering expertise for the project management unit, which prepared the specifications for the capital works, tendered them out and monitored their progress. The KPMG-led consortium which mostly provided pre-reform consultancy, received Rs.41 crore as fees funded by the Orissa government from the World Bank loan. Other firms who came into the scene after the reforms process got going such as PWC, CSFB and Merz McLellan, received Rs. 110.611 crore, Rs.105.26 crore and Rs.49.43 crore respectively from out of the DFID grant.
Among this string of
International biggies , one local entity, Xavier Institute of Management,
Bhuvaneswar had a small share of the pie (Rs. 11 lakh) for rendering services to
conduct a social study on the reforms. |
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