Union ministry asks 6 states to clear dues to power stations, Coal India

'Lack of payment discipline' is hurting electricity generation and investments in the sector, says letter.

The union power ministry has asked six states to clear dues they owe to power generating stations and national miner Coal India Limited (CIL).

Alok Kumar, secretary at the ministry, in a letter said the inability of utilities to pay for dues against electricity dispatched and the coal received is “increasing the electricity supply side concerns to unprecedented levels.”

The letter has been sent to Uttar Pradesh, Tamil Nadu, Madhya Pradesh, Jammu and Kashmir, Maharashtra, and Rajasthan, states which have the highest dues among all. Tamil Nadu is the biggest defaulter with Rs 20,842 crore dues to the gencos and Rs 700 crore to CIL. It is followed by Maharashtra with Rs 18,000 crore dues to gencos and Rs 2,500 crore to CIL. UP owes Rs 9,000 crore to gencos and Rs 300 crore to CIL.

Kumar’s letter urged states to direct the utilities to immediately clear the outstanding dues, failing which the electricity supply to the states “might get severely affected”.

“Lack of adherence to basic payment discipline by the Utilities is not only causing supply side problems in generation of electricity, but is also adversely affecting new investment in the sector. Public utilities have higher responsibility to be ideal paymasters and upholders of Contract laws of the country and that repeated indiscretion on part of the Utilities goes against the very essence of these basic responsibilities,” his letter said.