‘Coal block cancellations will put us back by a Plan period’
How important is the recent Cabinet decision clearing a recast of distribution sector losses, both as a sentiment booster for the sector and in commercial terms for NTPC?
This (the decision to recast debt) is a springboard given by the Centre for states to take real corrective reforms in the distribution sector. Going beyond the positive impact for NTPC, the step, if implemented in the right earnest, could offer a booster for the economy as a whole... It’s good for us (NTPC) as state electricity boards are our immediate customers and any measure that helps restore their financial viability will, in turn, help improve our position...
Does this partially mitigate the mess in power sector?
The problems in the power sector are two pronged — one being the distribution losses and the second on the coal supply side. So while the debt recast mitigates the distribution side problem, on the coal supply side though, the issues remain. There is absolutely no sign of anything drastic being done on the coal side. It’s true that new FSAs (fuel supply agreements) are being signed (by Coal India Ltd), which
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