Discoms Pay Off Rs 10,000-cr Dues
STATE POWER COS’ LIQUIDITY GREW ON ISSUE OF `1 LAKH CR OF UDAY BONDS
Power distribution companies, mainly in Jharkhand and Jammu & Kashmir, settled dues of about `10,000 crore to central generation companies in April, bringing down total outstanding amount by 45% from `22,000 crore in March.
Analysts said distribution companies’ liquidity increased after about `1 lakh crore of bonds were issued under the Ujwal Discom Assurance Yojana scheme, which enabled some states to pay off amounts owed to power suppliers. UDAY scheme was approved by the Cabinet in November to help the financial turnaround of power distribution companies.
Power producers Damodar Valley Corporation, NHPC and SJVNL were the largest beneficiaries of UDAY. Jharkhand and Jammu & Kashmir paid about `9,000 crore to these generating companies. These states have issued UDAY bonds of `6,136 crore and `2,140 crore, respectively.
“We had about `8,000 crore of dues from Jharkhand State Electricity Board. This included `4,500 crore as principal outstanding and `3,500 crore as surcharge. After they had issued UDAY bonds, their financial position improved, allowing them to settle our dues,” said an official from DVC.
Kolkata-based DVC, which is present in Jharkhand and West Bengal, has been under financial stress due to huge payment arrears by consumers. Having received outstanding amount, DVC'S financial position is expected to improve. “Jammu & Kashmir has also been able to settle dues that were long pending. They settled a large part of their dues with NHPC,” a senior analyst with one of the Big Four consulting companies said.
However, states that issued largest volume of UDAY bonds, including Rajasthan, Uttar Pradesh, Punjab and Haryana, did not see much change in outstanding positions over past few months.“we expect to see dues of generating stations to decline and financial positions of discoms to gradually improve from this year onward. As the effect of UDAY come into play, dues are expected to reduce further,“the analyst said.
POWER PRODUCERS DAMODAR VALLEY CORPORATION, NHPC AND SJVNL WERE THE LARGEST BENEFICIARIES OF UDAY