Zero-tolerance policy: NTPC threatens to cut power supply to defaulters UP and MP

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October 29, 2021 5:00 AM

If immediate arrangements are not made, both the states could lose 2,793 MW and 2,430 MW of power supply, respectively, from several NTPC power plants.

NTPC had also sent a similar regulation notice to UP in August to recover unpaid dues of Rs 1,160 crore.NTPC had also sent a similar regulation notice to UP in August to recover unpaid dues of Rs 1,160 crore.

With the Union power ministry directing government-owned power companies to adopt a “zero tolerance policy” regarding payment delays from states, NTPC has threatened to cut part supplies to Uttar Pradesh and Madhya Pradesh from Sunday if the bills are not cleared soon. While UP’s cumulative dues to NTPC currently stand at Rs 1,786 crore, of which Rs 821 crore remains unpaid beyond due dates, the total receivables from MP is Rs 1,645 crore of which bills of Rs 683 crore have crossed payment deadlines.

If immediate arrangements are not made, both the states could lose 2,793 MW and 2,430 MW of power supply, respectively, from several NTPC power plants. As per the regulation notices sent to states by NTPC on October 22, the dues have been pending in spite of “repeated follow-ups at various levels in person as well as through letters”. After a meeting between several power plants and senior government officials held on October 8, the Union power ministry issued directives on October 21 to central government power companies stating that “in case of delay in payment from states beyond due date, regulation of power shall be started for at least 50% of the power supply and gradually increase the quantum of regulation”.

NTPC had also sent a similar regulation notice to UP in August to recover unpaid dues of Rs 1,160 crore. Sources said that the state utilised the second tranche of loans from PFC-REC under the Rs 1.25-lakh-crore liquidity infusion scheme to clear some of the dues. Government sources said NTPC had issued a similar regulation notice to MP on September 1, after which the company had received Rs 486 crore from the state.

As FE recently reported, on behalf of the Centre-run power producers such as NTPC, the Union power ministry has invoked the seldom-used tripartite agreements between itself, the RBI and the respective state governments, to recover the power dues from Karnataka (Rs 1,540 crore), Tamil Nadu (Rs 2,458 crore) and Jharkhand (Rs 1,126 crore). As per the TPAs to which RBI, Union power ministry and state governments/UTs concerned are signatories, the central bank is required to deduct amounts equal to discoms’ overdues from the accounts of states/UT and pay it directly to the genco.

As per the ‘Praapti’ portal, discoms’ overdues to gencos at September end stood at Rs 92,895 crore, down 4.4% from a year ago, reflecting the utilisation of the PFC-REC loans. After sharply dipping in March (to Rs 80,000 crore from Rs 97,000 crore in February) after receiving funds under the liquidity infusion scheme, overdues to power plants had gradually increased to Rs 99,000 crore in August, before moderating in September.

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