CII asks govt to hold back loans to Andhra discoms under Rs 90K cr package

The CII has urged the Centre to not release more funds to Andhra under the Rs 90,000-crore bailout package scheme for discoms until its existing dues are cleared
CII asks govt to hold back loans to Andhra discoms under Rs 90K cr package
  • The outstanding dues of Andhra Pradesh discoms stood at Rs 4,466 crore at the end of June, official data showed

  • The CII told the minister that Andhra Pradesh discoms have made "arbitrary and unexplained" deductions as part of the interim tariff

New Delhi: The Confederation of Indian Industry (CII) has urged the Centre to not release more funds to Andhra Pradesh under the Rs 90,000-crore bailout package scheme for discoms until its existing dues are cleared. In a letter addressed to Union Power Minister RK Singh, the industry body said, "CII requests the ministry to hold back any further disbursement under the discoms liquidity package to the AP Discoms till the amount withheld by AP Discoms on account of above-mentioned reasons is paid in full to RE generators."

The outstanding dues of Andhra Pradesh discoms stood at Rs 4,466 crore at the end of June, official data showed. The government had announced the Rs 90,000-crore stimulus package in May this year as part of Aatmanirbhar Bharat Abhiyan in order to alleviate the financial stress on discoms and revive cash flow in the power sector.

The special case of Andhra Pradesh's discoms

In July 2019, the YS Jagan Mohan Reddy-led government in Andhra Pradesh had declared that it will not honour the power purchase agreements (PPA) signed by the previous government and will renegotiate the purchase cost of wind and solar projects already awarded. The High Court had then issued a stay order and had directed discoms in the state to clear the dues owed in December after the renewable energy developers took the state to court.

The court had asked the state discoms to pay Rs 2.44 per unit for solar energy and Rs 2.43 per unit for wind energy until the matter reaches a conclusion. On the basis of these calculations, the state released Rs 2,500 crore in January this year, which was about 40 percent of the dues. In its letter, CII said that according to its estimates, another Rs 1,000 crore is immediately payable to the developers.

Andhra Pradesh discoms making 'arbitrary, unexplained' deductions: CII

The CII told the minister that Andhra Pradesh discoms have made "arbitrary and unexplained" deductions as part of the interim tariff. "None of the above deductions can be considered legitimate under the incumbent regulatory or legal framework," the letter said. The letter comes a week after the solar power industry sought intervention from the Centre for expediting the resolution of the legal tussle over the state's move to renegotiate already-signed PPAs.

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