Bihar joins Uday discom debt restructure scheme

Bihar became the sixth state on Monday to join the Ujwal Discom Assurance Yojana (Uday) discoms' debt restructuring scheme by signing the tripartite agreement with the union power ministry and the state distribution company (discom).

Of the total discom debt in this case of Rs.3,110 crore, the state government would take over 75 percent, while the balance debt would be re-priced or issued as government guaranteed discom bonds at coupon rates of around 3 percent, or less, than the average current interest rate, as per the Uday scheme.

"The annual saving in the interest cost to the state would be around Rs.117 crore on account of restructuring of the discoms debt," said Power Minister Piyush Goyal said at the signing ceremony here.

"The reduction in AT & C losses and transmission losses to 15 percent and 4 percent, respectively, is likely to bring additional revenue of around Rs.6,650 crore during the period of turnaround," he said.

"We remain committed to all the projects that were announced as part of the Bihar package, including Rs.5,800 crore for Deen Dayal Upadhyay Gram Jyoti Yojana and Rs.2,900 crore for the Integrate Power Development Scheme. For the UMPP (ultra-mega power project) at Banka, a mine has also been allotted," he added.

Savings in interest costs, reduction in AT & C and transmission losses, coal reforms and other initiatives will help bring Bihar Rs.9,000 crore.

Apart from Bihar, Rajasthan, Uttar Pradesh, Chhattisgarh, Jharkhand and Gujarat have also signed agreements for Uday, which covers Rs.1.4 lakh crore, or 33 percent of the total discom debt in the country.