Sunday, May 22, 2022

Discoms owe over Rs 1 lakh crore in dues to gencos: RK Singh tells RS

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  • The main reasons for the increase in outstanding dues payable by discoms include high AT&C loss, low tariffs, delayed & inadequate payment of outstanding subsidies & dues
  • Central government generation companies regulate power supply to discoms in case of persistent non-payment of power dues, the minister told the House

New Delhi: Discoms owe a total amount of Rs 1,00,931 crore to power generating companies (gencos), Minister for Power RK Singh told the Rajya Sabha on Tuesday. “As per data provided by the power sector Generating companies, on the PRAAPTI Portal, at the end of February, 2022, a total amount of Rs 1,00,931 crore is due from the DISCOMs,” said Singh in a written response to a question raised in the Rajya Sabha.

Elaborating on the reasons behinds the increase in the outstanding dues, Singh said, “The main reasons for the increase in outstanding dues payable to GENCOs and poor financial performance of DISCOMs include high AT&C loss, tariffs not reflective of costs, delayed and inadequate payment of outstanding subsidies as well as Government Departmental dues by the State Governments and weak corporate Governance practices.”

Operational efficiency in DISCOMs

The government has made several interventions to improve the operational efficiencies of DISCOMs linked to reform measures, including Liquidity Infusion Scheme (LIS), additional borrowing of 0.5 percent of GSDP to states linked to power sector reforms, introducing additional prudential norms for lending by Power Finance Corporation (PFC) Limited and REC Limited based on performance of utilities, and launching Revamped Distribution Sector Scheme (RDSS). All these measures link the financial assistance to DISCOMs and states with power sector reforms aimed at improving the financial condition of DISCOMs, and also for increasing accountability of states and DISCOMs. “Central government generation companies regulate power supply in case of persistent non-payment of power dues,” said the minister.

“Poor liquidity arising out of the adverse financial position of DISCOMs not only causes problems to consumers in terms of poor power supply, but also causes problems upstream in the power sector value chain. Cash-strapped DISCOMs find it difficult to pay their creditors, including generating companies, who, in turn, are not able to pay for coal supplies and Railways freight, as well as salaries to their staff and repayment of bank loans taken for the construction of the plant (sic.),” said Singh. 

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