Delays in the implementation of the financial restructuring plan for the ailing distribution utilities announced by the Centre in September last year is expected to dominate the meeting of state power ministers convened by the power ministry in New Delhi on February 5.
“This is the maiden interaction between Power Minister Jyotiraditya Scindia and state power ministers to take stock of the financial restructuring of distribution utilities. The government has extended the validity date till March 31, 2013 from December 31, 2012. However, several distribution utilities are yet to submit their proposals due to the delays involved in getting approval from the respective states. Besides, there is a visible trend wherein some distribution companies prefer load shedding despite availability of power in the market to cut financial burden,” a power ministry official told Business Standard.
The accumulated losses of the state power distribution companies (Discoms) are estimated to be about Rs 1.9 lakh crore as on March 31, 2011.
Icra, in its report released on January 30, said the debt restructuring is inevitable for the stressed utilities, as alternate options are limited, given the tightening of the credit disbursement conditions by lenders.
However, timely implementation of this scheme & political will of the state governments to comply with the stipulated conditions would be a key challenge.
The power ministers are also expected to deliberate on the progress made on the implementation of the Centre’s flagship programmes including Rajiv Gandhi Gramin Vidyutikaran Yojana (RGGVY) and the Restructured-accelerated power development and reform programme (R-APDRP).
According to the report released by the Central Electricity Authority, by the end of the Eleventh Plan, out of the total 5,93,732 villages in India (Census 2001), 5,56,633 villages (93.8 per cent) have been electrified. Some of the villages which have been electrified, that is, connected to the grid, have not yet been energised. The gap is primarily in the states of Bihar, Jharkhand, Odisha and Assam. Most of the projects are expected to be completed during 2012 except in the north-eastern region and in areas involving difficult terrain.
“States will highlight deficiencies in the RGGVY programme and remedies. About 6,000 villages electrified till December 2011 were still not energised due to lack of a supporting network or other resources. Secondly, access to electricity in rural areas is still limited, especially in smaller hamlets. Poor financial health of utilities and high cost of power act as a disincentive for states to give new connections,” the official said.
On restructured-APDRP, the official informed that the issue was discussed at the National Development Council meeting. The Working Group for the Xiith plan has assessed a total investment requirement for the distribution sector at Rs 3.06 lakh crore. The population norms under R-APDRP for including a city under R-APDRP may be relaxed by lowering the existing population threshold. The official admitted that more extensive coverage will bring uniformity in billing and customer service of the utility across all its service areas. “The issue of covering assistance to private distribution companies under Restructured-APDRP will be discussed at Tuesday’s meeting,” the official said.
