The Rs 1.9-lakh-crore debt recast for power distribution companies (discoms) that began a year ago has boosted the liquidity of scores of these firms, enabling many of them to start clearing the dues to generators and trading firms.
UP Power Corporation (UPPCL) has cleared Rs 10,800 crore in power purchase dues to various companies, including the state-owned NTPC and private players such as Adani Power and PTC India.
Heavily indebted discoms from other states such as Tamil Nadu and Madhya Pradesh have also cleared their dues to power companies in recent weeks.
For example, Tamil Nadu discom has paid more than Rs 300 crore in power dues to Lanco Infratech and NTPC Vidyut Vyapar Nigam, MP has cleared power purchase dues of Rs 80 crore.
Meanwhile, discoms from Andhra Pradesh, Jharkhand and Bihar, too, are in line for debt restructuring after the Cabinet recently gave the go-ahead for extending the financial restructuring plan (FRP) cut-off date by one year to March 31, 2013 to enable these discoms access the debt recast facility. The discoms in these three states, which owe more than Rs 7,000 crore in dues to central generating stations like NTPC and NHPC, could also start clearing their dues once their debts are recast by lenders, industry sources said.
Discoms in Tamil Nadu, UP, Haryana and Rajasthan have raised tariffs by 20-35% over the last couple of years in order to qualify for the debt recast package.
Major payments made by the UP discom include Rs 1,050 crore to NTPC, Rs 800 to Tehri Hydro Development Coproration ( THDC), Rs 778 crore to PTC India, Rs 550 crore to PowerGrid and Rs 495 crore to Adani Power.
Further, UPPCL has also cleared Rs 1,100 crore of dues to discoms in Delhi and other power surplus states for overdrawing their electricity from the grid through unscheduled interchange ( UI) route. UP had been heavily overdrawing electricity through the UI route.
The Centre?s bailout plan came into force in September last year. Till now, four states ? Tamil Nadu, Rajasthan, Haryana and UP ? have availed of the facility.
The debt restructuring was more urgent for UP as it had to rely on the open market. ?Clearance of dues by the UP discom to power companies is a positive impact of the FRP,? said Debasish Mishra, senior director, Deloitte.
Salil Garg, an analyst with India Ratings, said: ?Implementation of FRP by some states has not only improved their discoms’ cash flows but has also proved positive for utilities’ operations as they are required to revise tariffs on a regular basis.?