Professional Documents
Culture Documents
Distribution Franchisees
The Business Sense
æ Deals
Deals with
with
a single
a single
agency
agency
æ Improved
Improved service
service
to to
members
members
æ
Transfer
Transfer
of of
technical
technical
andand
non-
non
- at reduced tariff
technical risk
æ
Business
Businessopportunity
opportunityforfor
æ
Reduced
Reduced capital
capital
andand
operating
operating distribution company
expenses
Benefits
employees
æ
Reduced
Reduced requirement
requirementonon
management time
æ
Share
Share
in in
savings
savings
due
due
to to
loss
loss
reduction
reduction
æ
Improvements
Improvements in in
service
service
Consumer
A typical implementation, suggested by CRISIL Infrastructure There are certain issues that need to be addressed
Advisory, would involve the following steps: before the parties concerned realize the benefits of
such an arrangement. Some of the issues are:
Identification Phase ÜThe ownership of assets how that should be
ÜIdentifying the area where such an initiative can be taken. considered for the purpose of calculating returns.
ÜSensitizing the various stakeholders in this area to the ÜSuccess in service levels within a short period of
potential benefits of such an initiative and seek their time to arouse and sustain consumers' interest.
cooperation in this process. ÜIssues relating to theft and non-payment.
ÜAchieving a proper energy accounting process. ÜIncorrect billing and unjust disconnection by the
franchisee
Transition Phase ÜPerformance guarantee by the franchisee
ÜAppointing franchisees with an initial focus on ÜParallel network distribution licensees
commercial loss reduction.
ÜClearly establishing the roles and responsibilities of the
franchisees and framing the terms and conditions of the
agreement for a management transfer.
Complete Transfer
ÜTransfer of managing the technical and commercial
responsibility to the franchisee.
ÜMonitoring and review of the implementation and
progress.
Management
Identification Transition Phase
Transfer
ÿèAppoint franchisees
ÿèIdentify region
initial focus on loss
reduction
ÿèTransfer of
ÿèSensitize stakeholders ÿèEstablish roles and responsibility as per
terms and conditions
to benefits
ÿèProper energy
responsibilities of
franchisees
ÿè Monitoring and review
conditions of
agreement
IMPLEMENTATION
We believe that we can play a substantial role in implementing this model for the benefit of all concerned. The services
that we envisage in this process include:
ÜIdentification of suitable areas by conducting studies to understand the socio-economic characteristics, load
characteristics and current loss levels.
ÜPresentation of the concept to targeted franchisees or the concerned distribution licensee.
ÜAssistance in agreeing on commercial loss reduction targets and profit sharing.
ÜDevelopment of the investments and profit sharing framework.
ÜDevelopment of the detailed financial model to decide on the initial term, profit sharing and discounts in tariff.
ÜDevelopment of the terms of the contract between the licensee and the franchisee.
ÜAssistance in implementing and monitoring on a regular basis.
Head Office
CRISIL House, 121-122,
Andheri-Kurla Road,
Andheri (East), Mumbai - 400 093
Tel: +91 (22) 5691 3001 - 9.
Fax: +91 (22) 5691 3000
Email: crisilinfrastructure@crisil.com
Branch Offices
Ahmedabad:
Paritosh Building, 3 Floor,
Near Darpana Dance Academy,
Usmanpura,
Ahmedabad 380 013
Tel: +91 (79) 755 0317 / 1533.
Fax: +91 (79) 755 9863
Bangalore:
W-101, Sunrise Chamber, 22,
Ulsoor Road,
Bangalore- 560 042.
Tel: +91 (80) 558 0899, 559 4802.
Telefax: +91 (80) 559 4801
Chennai:
Mezzanine Flr, Thapar House, 43/44,
Montieth Road, Egmore,
Chennai - 600 008
Tel: +91 (44) 2854 6205 / 8834.
Fax: +91 (44) 2854 7531
Hyderabad:
4, Nagarjuna Hills, ICICI Building,
Punjaguta,
Hyderabad - 500 082
Tel: +91 (40) 2335 8103.
Fax: +91 (40) 2335 7507
Pune:
1187/17, Ghole Road, Shivajinagar,
Pune 411 005
Tel: +91 (20) 553 9064 to 67.
Fax: +91 (20) 553 9068
Website: www.crisil.com/advisory