Haryana signs MoU with UDAY for electricity

The Haryana government on Friday signed a memorandum of understanding (MoU) with Ujjawal Discoms Assurance Yojana (UDAY) in New Delhi.

A government spokesperson said Haryana has joined the Ujjawal Discoms Assurance Yojana (UDAY) "to cut down the debt burden of DISCOMs, reduce the cost of power, pare down losses to 15 percent over the next three years, and financially turn around the power distribution companies".

The MoU was signed by Rajan Gupta, additional chief Secretary (Power), on behalf of the Haryana government, and Nitin Yadav, managing director of the two discoms UHBVNL and DHBVNL with A.K. Verma, joint secretary in the Ministry of Power.

On the occasion, Haryana Chief Minister Manohar Lal Khattar said that under the scheme, out of Rs.34,600 crore debt as on September 30, 2015, Rs.25,950 crore would be taken over by the state government.

In lieu of the loans taken from financial institutions by the DISCOMs, the state government will issue bonds which would carry much lower rate of interest compared to the loans from financial institutions.

The total debt of Rs.25,950 crore will be finally taken over by the state government over a period of next five years.

The implementation of the scheme would also help improve efficiency with the ultimate objective of providing 24X7 power to all consumers.

Union Minister of State for Power Piyush Goel said on the occasion that an overall net benefit of approximately Rs.14,160 crore would accrue to the state by opting to participate in UDAY, by way of savings in interest cost, reduction in AT&C and transmission losses, interventions in energy efficiency, coal reforms etc during the period of turnaround.

He said the discoms would overcome the losses in the next one year.