The Rural Electrification Corporation (REC) has blocked the disbursal of a sanctioned loan of R400 crore to the West Bengal State Electricity Distribution Company (WBSEDECL), as the latter has not yet filed a tariff petition for increasing power prices.

A WBSEDCL official told Fe that the company had sought the loan from REC to meet its working capital requirement. REC, after sanctioning the loan, asked WBSEDCL to provide documents that it had filed a tariff petition.

However, the power distributor said it had not been allowed to file a tariff petition since May this year.

Power secretary Malay Dey earlier said the company required at least a 30% increase in power tariff to operate on a no-profit-no-loss basis, but the government had not allowed any of the state power utilities to file a tariff petition.

REC estimated that WBSEDCL?which made a profit of R120 crore in 2010-11?would end up with a loss of over R2,000 crore in 2011-12 if it didn?t hike tariffs. It would not disburse a loan unless it is satisfied that the company would earn a profit.

State power minister Manish Gupta said there had to be an upward revision of tariff, and the state electricity regulatory commission was to decide on it. Though, at one point of time, the department expected chief minister Mamata Banerjee to give a green signal for tariff revision in November-end, she recently stressed that there would be no such move in the near future.

According to WBSEDCL officials, even if the company is allowed to file a tariff petition in December, it will take at least another two months for the new rates to be effective. So, in that case, there was little chance for the company to post a profit this year. It?s evident then that REC would push back the loan disbursement.

Meanwhile, WBPDCL has not got any response from the tender it floated for importing 4.5 million tonne of coal over three years. The Adani Group was widely expected to step in to supply imported coal, but it has backed out.

Officials said the contract with Adani for supplying imported coal would expire in January and, so, WBPDCL was looking for fresh contracts to get overseas coal, while it scrapped its memorandum of agreement with CIL for taking A and B grades of coal.

Officials said WBPDCL owes in excess of R100 crore to Adani and there are no Indian players right now to supply foreign coal to the company. It would, however, be difficult for the company to get a foreign supplier.

So, without coal, WBPDCL would have to drastically cut down production from February onwards, officials said.