The selection of the next Chairman and Managing Director (CMD) of NTPC Limited, India's largest power producer, has encountered a significant hurdle. The Public Enterprise Selection Board (PESB), the government's headhunter for state-owned companies, has declared that none of the twelve candidates interviewed for the position were found suitable. This development necessitates a shift in approach, potentially paving the way for a search-cum-selection committee to identify a suitable leader for the energy giant.

The PESB's decision, announced on Wednesday, May 21, 2025, marks another instance where the board has struggled to find appropriate leadership for key Public Sector Undertakings (PSUs). The current CMD, Gurdeep Singh, is set to retire on July 31, 2025, making the appointment of his successor a matter of urgency. The failure to find a suitable candidate through the conventional PESB process has prompted the Administrative Ministry to consider alternative selection methods, including the formation of a search-cum-selection committee (SCSC).

The search-cum-selection committee approach offers greater flexibility by allowing the consideration of candidates beyond the traditional PSU ecosystem. This method has been employed in the past when the PESB's selection process fell short. Interestingly, Gurdeep Singh himself was appointed NTPC CMD through such a committee in 2016. The PESB, a statutory body under the Department of Personnel and Training (DoPT), is responsible for recommending candidates for top management roles in central PSUs. Its process involves shortlisting candidates based on merit, seniority, and experience, followed by interviews. However, the limited candidate pool and rigid selection criteria have often been cited as challenges in finding suitable leaders.

Among the candidates interviewed by the PESB were three NTPC executives such as Shivam Srivastava, Director (Fuel); Ravindra Kumar, Director (Operations); and Shaswattam, Executive Director at NTPC. Other contenders included Somes Bandyopadhyay, the managing director of Gujarat State Electricity Corp. Ltd on deputation from NTPC, and individuals from other PSUs and government bodies.

NTPC is the latest in a series of blue-chip PSUs where PESB has encountered difficulties in finding suitable leadership. Since 2021, the board has failed to recommend candidates for CMD posts at several other major PSUs, including Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Ltd (HPCL), and Bharat Petroleum Corporation Ltd (BPCL). In several of these cases, the search-cum-selection committee route was ultimately adopted to fill the leadership void.

The incoming CMD will face several key challenges. These include expanding NTPC's green energy portfolio, establishing a renewable energy hub in Andhra Pradesh, and ensuring the growth of thermal power capacity amid the government's renewed emphasis on coal to meet surging power demand and maintain grid stability. Furthermore, the new CMD will need to consolidate NTPC's position in the nuclear power sector.

With the PESB unable to select the next CMD, the selection process is likely to be protracted. Typically, when the PESB does not recommend any candidate, the concerned ministry forms a search-and-selection committee, which again invites applications. This committee will have a year to complete the selection process, with the vacancy being advertised once again and candidates given four weeks to respond. The panel will then have three months to finalize the selection. The Ministry of Power may now consider forming a Search-cum-Selection Committee to identify suitable candidates from within and outside the current PSU leadership pool, including the consideration of the incumbent. The final decision rests with the appointments committee of the cabinet (ACC).

The failure of the PESB to find a suitable candidate raises questions about the effectiveness of the current selection process for top PSU jobs. Some experts suggest that the selection process needs improvement, with a focus on appointing CMDs and directors for a minimum term of five years, regardless of seniority. There is also a need for a pool of qualified candidates to expedite the selection and appointment process. As NTPC awaits the appointment of a new CMD, the energy sector watches closely to see who will lead the company through its next phase of growth and transformation.