While the government, Reserve Bank of India and the judiciary are grappling with the issue of stressed power projects worth Rs 2.5 lakh crore, the electricity distribution companies (discoms) are adding to the latter’s woes. Discoms’ unpaid dues to 23 power producers stood at Rs 44,195 crore at May-end, up 30% from the level a year earlier. In the six months to the end of May, these entities’ dues pending for more than 60 days rose 8.4% (CAGR) to Rs 33,650 crore.
Had the extra dues — Rs 13,260 crore — been paid by them in time, the discoms would not have reported the sharp cut in financial losses for FY18. The discoms had posted an annual reduction of Rs 17,352 crore (50%) in their losses by the end of March 2018, under the Ujwal Discom Assurance Yojana (UDAY) scheme.
Recently, the power ministry has told the parliamentary committee on energy that delayed payments by discoms is one of the reasons why the gencos’ debt servicing abilities are dented.
“We have been taking it up with the discoms regularly, requesting for tariff revisions..,” Ajay Kumar Bhalla, secretary, power ministry, informed the committee.
As per the latest data on the government’s ‘praapti’ portal, discoms’ outstanding dues to state-owned NTPC stood at `20,897 crore while dues to IPPs was Rs 14,938 crore.
Private power producers have sought a payment guarantee mechanism similar to what state-run NTPC enjoys for timely repayment of loans to banks. Under a tripartite scheme, including the state government and RBI, NTPC gets payment from the state if the discoms fail to pay up.
According to the portal’s index for ‘ease of making payments’, Maharashtra discoms have the highest dues relative to their purchases from the gencos, at Rs 3,298 crore, followed by Rajasthan (Rs 1,701 crore). Uttar Pradesh (Rs 6,140 crore), Tamil Nadu (Rs 4,354 crore) and Telangana (Rs 4,330 crore) have higher dues in absolute numbers but their payment discipline is reckoned to be better than the above because of higher purchases.
The RBI told the Allahabad High Court last week that it could not relax its February 12 circular mandating a 1-day default trigger for resolution of stressed assets, exclusively for the power projects. The Insolvency and Bankruptcy Code, in its current form, already covers all eventualities, and if the government feels, it should use its power and issue directions directly to the RBI, the central bank said.
As many as 34 power plants, with a combined capacity of 39 GW, are identified as stressed assets. Major stressed power projects are Adani Tiroda (3,300 MW), KK Akaltara (3,600 MW) and Jaypee Bara (1,980 MW).