New Delhi, Sept. 7: The Narendra Modi-government plans to rework the financial restructuring package for state electricity boards whose debts have mounted to over Rs 3 lakh crore by the end of the last financial year.
“The financial restructuring package (of the UPA government) was implemented 18 months after it was announced (which is) too late and it was lacking in a number of areas. We are in discussions with states to rework the financial restructuring plan,” Piyush Goyal, minister of state (independent charge), power, coal and new and renewable energy, said.
The state electricity boards have an accumulated debt of over Rs 3,04,000 crore and losses at Rs 2,52,000 crore, putting them on the brink of financial collapse, he said.
The accumulated losses of state power distribution companies (discoms) were estimated at around Rs 1.9 lakh crore as on March 31, 2011, and Rs 2.46 lakh crore as on March 31, 2012.
Goyal said the financial restructuring plan of the UPA government was an “incomplete and delayed scheme. It was announced in April 2012, but operationalised in October 2013. A restructuring plan is bound to fail even before it begins, owing to the burden of the 18-month delay. So, I think the government’s duty is to take action as soon as possible.”
According to the UPA government’s scheme, 50 per cent of the accumulated debt of the discoms till March 2012 could be converted into bonds. These bonds will be issued to the participating lenders, backed by state government guarantees. The balance 50 per cent loan will be restructured by providing moratorium on principal and best possible terms for repayments.
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The scheme is being implemented in Tamil Nadu, Rajasthan, Uttar Pradesh, Haryana, Jharkhand, Bihar and Himachal Pradesh.
The World Bank in its recent report has said power distribution companies should have good corporate governance and must be commercially operated, while regulators should revise tariffs in line with costs and create a predictable environment to take decisions. Power distribution utilities must be held accountable for efficient operation and banks and lenders should not lend to those who are not creditworthy, the report added.
Goyal said power stations faced coal shortage as stocks got consumed faster to generate more electricity.
“There is no low coal supply. The materialisation of coal is as per the plan in the last few years. The fact that coal production has not increased is what I have inherited. I cannot increase coal production in 100 days. But the fact is with the available resources we have increased electricity supply by 22 per cent,” Goyal said.
He said the government was committed to transforming the power sector and ensure affordable 24x7 power for all homes, industrial & commercial establishments and farms.
On rationalising coal linkage, he said 32,000MW of old power plants would be modernised.
“Automatic transfer of linkages is being allowed from old and inefficient plants to ultra-modern supercritical plants to maximise power generation from the same amount of coal. Coal linkage rationalisation is also underway (Gujarat and Chhattisgarh swap completed), which aims to link power plants to the nearest mines.”
He said the lower hydel power production was because of deficient monsoon.
Goyal also said several steps were being taken to resolve gas shortages that have curtailed operations od units. Plans have been made to use gas primarily to meet peak load demand or exigencies.
The agreement to operationalise the civil nuclear cooperation pact with Australia is likely to be ready in the next 3-4 months, Goyal said.
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