Gridco readies plan for turnaround in finances

State-owned power trading firm Gridco is all set to execute a plan for staging a turnaround in its stressed finances.

Leading infrastructure consulting firm Feedback Ventures has submitted a report, outlining the roadmap for Gridco's financial recovery.

"The strategies for Gridco's turnaround include sale of long-term, medium term and short-term surplus power and surrender of allocation of costly power from NTPC stations outside the state. Feedback Ventures has delineated the strategies in its report on Gridco's turnaround," said a government official.

Short-term power sale is targeted for states like Haryana, Rajasthan and West Bengal to overcome peak hour or seasonal deficit.
 

Gridco would enter into long term power sale agreements with targeted states having large deficits.

Hemant Sharma, chairman cum managing director of Gridco was not available for comments.

In 2016-17, Gridco is projected to be in a position to trade 2,673 million units (MU) of power enabling it with a surplus of Rs 134 crore, considering a profit margin of Rs 0.50 per unit. The surplus power availability for 2017-18 and 2018-19 is pegged at 5,188 MU and 20,092 MU respectively that would help Gridco mop up surplus of Rs 260 crore and Rs 1,005 crore.

According to provisional figures, Gridco ended 2014-15 with a loss of Rs 271 crore. The power trading firm's cumulative losses have mounted to Rs 3,476 crore by the end of last fiscal.

By the end of 2014-15, Gridco had an outstanding loan of Rs 4,843 crore. Reeling under financial stress, Gridco has also availed Rs 1,000 crore as inter-corporate loan from state owned miner Odisha Mining Corporation (OMC). Gridco borrowed from OMC to clear its mounting dues and also to swap some high cost loans.

Non-payment of bulk supply power (BSP) dues and loan dues by electricity distribution companies (discoms) had added to Gridco's financial woes. Gridco was saddled with arrears from discoms to thetune of Rs 5,094 crore by end of 2014-15.

Procurement of high cost power from NTPC stations located outside the state like Barh and Kahalgaon, both in Bihar, also hurt Gridco's operations. The state government has decided in principle not to go for procuring costlier power from such stations. Besides, congestion in inter-state transmission and lower price realisations from energy exchanges also affected Gridco's earnings. Gridco's annual revenue requirement for 2015-16 has been pegged at Rs 882 crore for this fiscal.