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State-run power generator NTPC may get its first chairman and managing director from the private sector with the government expanding scope of search as incumbent Arup Roy Choudhury's term comes to an end.
According to four people in the know, Tata Power Company managing director and chief executive officer Anil Sardana, Punj Lloyd CEO JP Chalasani and Jayadeb Nanda, chief operating officer (operations and maintenance) at Adani Power, are being considered from the private sector. All three started their careers with NTPC between 1979 and 1981. NTPC's current director finance, Kulamani Biswal, is also in the reckoning.
"The government is seriously considering getting a private sector executive to make NTPC more competitive. The idea is to get someone who has worked with NTPC before to ensure an easy transition. This will keep our senior management on its toes as now they can't assume that they would naturally progress to a leadership role," a senior NTPC executive told ET.
An NTPC spokesperson declined to comment, stating that the decision will be taken by the selection committee, which is headed by the power secretary. When contacted, Tata Power's Sardana declined to comment. Punj Lloyd's Chalasani said, "I am not aware of any such development yet." Adani's Nanda did not respond to the email query.
The public sector has often lost talent to the private sector, but the government is looking to appoint some leaders from the private sector to make state-owned companies more competitive. So far, such appointments have been restricted to banks with the government appointing private sector executives as heads of Canara Bank and Bank of Baroda.
Last year, the government had invited private sector executives to apply for the post of Chairman and Managing Director for Coal India, who could spearhead the company's turnaround but received poor response with only one application from the private sector. The disparity in salaries between the PSU and private employer has often been the deal breaker.
"Private sector has strict incentive-driven model which encourages entrepreneurship, efficiency and competitiveness. Businesses have become complex and it is great that the government is look ing at attracting the best talent to strengthen PSUs. Of course, the salary packages would need to be rationalised and it would also help if the age limit is relaxed as most top executives can be very productive for years after the government's mandated retirement age," said Pradeep Singh, CEO of the Mohali Campus and Deputy Dean of the Indian School of Business, who is also a former bureaucrat.
According to annual reports of the companies, Chalasani's remuneration for the year ended March 2015 was Rs 3.35 crore, while that of Sardana was Rs 5.53 crore, while NTPC's Roy Choudhury took home a modest package of just Rs 50 lakh. "It helps that the government is planning to offer a bet ter package than what exists right now, but it won't be able to match the private sector. But some private sector executives are still interested in the job, given the prestige and emotion involved in running the country's largest power generator," said a top industry executive.
NTPC's CMD Roy Choudhury's five-year term comes to an end this August 31. The government decided not to extend his term for another two years, as has been the practice, and instead set up a selection committee to scout for a new head. He is the second head of a public sector company after SAIL chairman and managing director CS Verma who did not get an extension.
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