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Phase 1 – Introduction of interviewers and interviewee.

Phase 2- A brief intro about the sector and company in particular-

Us – Pl provide us with a snapshot of the company and the electricity sector in general-

Him – Odisha is divided into 4 parts as far as electricity is concerned. These are CESU (Central electricity
supply unit- earlier named as CESCO), NESU (North), SOUTHCO (South) and WESTCO. Earlier there were
state electricity boards in most of the states, however the same have been abolished under the
Electricity Act, 2003. These have been replaced by companies. These independent companies as
mentioned above report to the Energy Secretary of the state (Mr Hemant Sharma). By adopting this
private partnership has come into play. There are two models through which it can be done- License
model (eg. Tata Power Delhi) and Franchisee model (eg. FEDCO). It is basically an outsourcing that is
done. In this particular case CESU is licensee and FEDCO is franchisee. The licensee can procure power
whereas the franchise doesn’t have this. FEDCO act as an intermediary between CESU and the end
customers. FEDCO works basically on a mix of two – B2B and B2C – while dealing with CESU it is B2B
model and while dealing with customers it is B2C model.

Phase 3- Company History

The holding company for FEDCO is Feedback Infra Pvt. Ltd. It is a 27 years old company, which was
started by a group of friends in 1989 in Gurgaon. It is into consulting, energy, project management,
advisory, infrastructure and design engineering. The opportunity to move into distribution came a few
years back and it grabbed that. FEDCO started with 4 divisions in Odisha and have now 5 divisions in
Madhya Pradesh too. CESU is the monitoring agency for FEDCO. The pricing is done by the regulatory
commission as per the tariff. It works on efficiency model- Input based franchisee on incremental
sharing model. For eg. if CESU is able to collect only 100 cr out of 200 cr from the customers, it is up to
FEDCO to collect the remaining the balance 100 cr and this collected amount is shared between CESU
and FEDCO. CESU is running at 65% losses and there is ample opportunity for FEDCO. Such companies
work on AT & C losses (aggregate technical and commercial losses).

FEDCO is currently serving 11 lakh customers. A strong feedback system from customers has make this
company stand apart from others. Feedback is a regular activity and every feedback’s suggestion /
complaint is being worked upon. Old technologies are being done away with however, it will consume
some time before new systems are set as they are catering to a completely different set of customers.
FEDCO has doubled the collection in last four years and its growth path is well though and chartered.
Collection from public is not that easy. Some customers have to be convinced, some have to be dealt
with firmly (like disconnecting the line) and some have to be cajoled to pay the dues.

Positioning

FEDCO has two competitors- Engine and Shyam Indus. All the 14 divisions of Odisha have been divided
amongst these three. The best performance is given by FEDCO that has reduced the losses by 23%,
followed by Engine (reduced losses by 3% ) and Shyam Indus (increased losses by 4%). This is across
Odisha. On a pan India level although it would not be termed as a level playing field because the no 1
position is being held by Torrent Power, Bhiwandi is holding an area of only 60 sq kms and it has
reduced the losses by 48% (AT & C) whereas FEDCO is catering to an area of more than 10,000 sq kms
with most of the customers from rural belt.
Tender Process-

Notice – Request for Proposal- Bidders – if only 1 bidder- re bidding- quote the price and AT & C – L1 will
be awarded the contract

FEDCO purchases the meters and distributes to the customers. Superior technology is replacing the
older and traditional ways of taking meter reading etc. Now handheld IR machines are being used for
the same. IR port is in the machine also and the meters also, thus removing the human interface in the
process. Billing software has been developed and deployed by FEDCO. This software has become so
popular that FEDCO has started selling it in bits and in totality to other companies.

The database of the customers has to be shared with CESU and not FEDCOs P and L account, balance
sheet etc. FEDCO has solid plans for expansion and it has already bid for 6 more divisions in NESCO.

Recent Problem – the contracts are awarded for a period of 5 years and FEDCOs term ended this year in
January. Ideally, the company should have got this message of extension of contract (for 5 or 10 years)
well in advance but, CESU kept on extending it till the end and it became difficult for FEDCO to arrange
for financials. It was not able to overcome this hence, no more loans by banks because no proof of
extension of contract. These are typical bureaucracy hurdles and difficult to overcome. Officers at CESU
keep changing and FEDCO is constantly engaged in building relationships with new office-bearers.