No shock therapy for Transco; wants easy repayment terms

New Delhi, Nov 15 | Updated: Nov 16 2005, 05:30am hrs
Delhi Transco Ltd (DTL), which is responsible for supplying power to Delhis distribution companies (discoms), has asked the Delhi government to decide on the terms and conditions governing the repayment of the loan amount of Rs 3,450 crore, which it had taken from the government when it was unbundling Delhi Vidyut Board (DVB) in the year 2002. It has also asked the government to convert the existing loan into a soft loan and lower the interest rate, which is pinned at 13%.

DTL had taken the loan to bridge the gap between its revenue requirement and the bulk supply price which it would receive from the discoms.

The terms and conditions were not held out during the time of privatisation. Despite the four-year moratorium nearing its end, no notification has been made by the government.

Keeping in view that it is the consumer who bears the brunt of increased tariff, DTL has asked the government to go soft on the loan repayment. "We have written to the government to fast-track identifying the method of repayment. Besides, we have requested them to lower the interest rate, so that our revenues do not suffer due to the excessive burden of repayment," said Arun Goyal, DTL CMD and principal secretary, power.

"Our revenues also depend on the reduction in aggregate tariff and commercial losses. We have reduced these losses , but to cut down on them beyond a certain limit is difficult ," he added .

In the transfer scheme, the government had decided to subsidise DTL to the extent of Rs 3,450 crore through four pre-set yearly installments. The subsidy was provided to meet the gap between the bulk and retail prices, till the loss situation was brought under control.

As per the Delhi Electricity Reforms Act 2001, the Delhi government unbundled DVB into six companies --- generation company (Genco) for generation of electricity, transmission company (Transco) for procurement, transmission and bulk supply of electricity and three other distribution companies.