Gridco presents it's side of REL dispute

The state-owned Gridco today presented its case before the inter-ministerial committee (IMC) constituted by the Orissa government relating to its dispute with Reliance Energy Ltd (REL), which owns three of the four power distribution firms operating in the state.

The second meeting of the panel is scheduled to be held after 10 days in which REL would be called to present its case.

After both sides are heard, the committee would take a decision in the matter, said state finance minister Prafulla Chandra Ghadai.

The IMC comprises of ministers of finance, industry and steel and mines, tourism and higher education, rural development, law and energy.

It would take stock of issues like servicing of NTPC bond, payment of outstanding Gridco loan, payment of outstanding government loan and system upgradation in the power distribution sector. Besides, the committee would suggest measures to deal with them.

Sources said, after privatisation of distribution business in the state, four distribution companies namely Wesco, Nesco, Southco and CESU defaulted in payment of bulk supply dues and loan dues to Gridco. Consequently, Gridco also defaulted in payment of dues to National Thermal Power Corporation (NTPC). A minute of discussion was signed between NTPC, Gridco and BSES (now Reliance Energy) and the distribution companies for securitisation of dues payable by distcoms to Gridco and dues payable by Gridco to NTPC in 2000.

Subsequently, three REL owned distribution companies issued bonds aggregating Rs 400 crore to Gridco effective from 1 October 2000 and Gridco, on its part, transferred these bonds to NTPC in March 2001.Meanwhile, the Union government implemented the Onetime Settlement Scheme (OTS) recommended by the Alhuwalia committee, as per which the State Electricity Boards (SEBs) were allowed waiver of 60 percent on delayed payment surcharge (DPS). The respective state governments were required to issue tax free bonds to NTPC covering principal outstanding and 40 percent DPS.

Following the cue, the state government agreed to issue bonds to NTPC in respect of Rs 1102 crore outstanding dues payable by Gridco. It excluded Rs 400 crore bond issued by distcoms and re-pledged to NTPC.