Maharashtra has become the 17th state to join the UDAY scheme, meant for financial turnaround of debt-laden power distribution utilities, and it will help the state save around Rs 9,725 crore on account of cheaper funds and cut in AT&C losses.
Government of India signed a Memorandum of Understanding (MOU) with Government of Maharashtra and Maharashtra State Electricity Distribution Co Ltd (MSEDCL) under the Ujwal DISCOM Assurance Yojana (UDAY) at the two-day State Power Ministers Conference in Vadodara today, the Power Ministry said in a statement.
Under UDAY, sixteen states/UTs have already signed the MoU till date, Maharashtra being the 17th.
The combined discom debt, including central PSU dues, that would be restructured in respect of these states is around Rs 2.57 lakh crore, which is around 68 per cent of the total outstanding discom debt as on September 30, 2015, it said.
An overall net benefit of approximately Rs 9,725 crore would accrue to Maharashtra by opting to participate in UDAY, by way of cheaper funds, reduction in AT&C losses, interventions in energy efficiency, coal reforms etc during the period of turnaround, the Ministry said.
Under UDAY, Maharashtra has committed to take over 75 per cent of discom’s non-capex debt of around Rs 6,600 crore during the current year, the statement said, adding the balance 25 per cent of such debt remaining with the discom would be converted into bonds or repriced at cheaper rates. This would reduce the interest burden of the state/discom by Rs 595 crore.
While efforts will be made by the state government and the DISCOM to improve the operational efficiency of the DISCOM, and thereby reduce the cost of supply of power, the central government would also provide incentives to the DISCOM and the state government for improving power infrastructure in the state and for further lowering the cost of power.
The ultimate benefit of signing the MOU would go to the people of Maharashtra as reduced levels of transmission and AT&C losses would mean lesser cost per unit of electricity to consumers, the statement said.
Further, financially and operationally healthy discom would be in a position to supply more power. Higher demand for power would mean higher Plant Load Factor (PLF) of generating units and therefore, lesser cost per unit of electricity which would again mean lesser cost per unit of electricity to the consumers.