With the state-owned power generation, transmission and distribution companies together reeling under a massive debt burden of over Rs45,000 crore, the Maharashtra government is looking at restructuring and refinancing these borrowings to lower the burden on consumers. The impact of these costly, high-interest loans and the need for this debt restructuring may be gauged from the fact that even a 2% reduction in the interest payout will lead to tariffs for consumers reducing by around 10 paise per unit.
State finance minister Sudhir Mungantiwar told dna that the three companies, which were carved out of the unified Maharashtra State Electricity Board (MSEB) in 2005, had a total of Rs45,685 crore loans, involving interest payouts to the tune of around Rs5,524 crore every year.
"We are in discussions (with financial institutions) for shifting, re-scheduling or re-financing these debts at lower rates of interest... This will be very beneficial," he added. He blamed the previous Congress-NCP-led state government for lack of fiscal discipline.
The Maharashtra State Electricity Distribution Company Limited (MahaVitaran) had borrowings to the tune of Rs12,689 crore, with Rs1,586 crore interest payouts at the rate of 12.23%. The Maharashtra State Power Generation Company (MahaGenco) has Rs25,553 crore debt at 12.60% interest rate and pays Rs3,058 crore interest annually; the debt servicing costs for the Maharashtra State Electricity Transmission Company Limited (MahaTransco) are Rs880 crore with Rs7,443 crore loans at 12% rate of interest.
The MSEB was restructured into four companies — the MSEB Holding Company, MahaVitaran, MahaGenco and MahaTransco — in 2005. This was done after the enactment of the Electricity Act, 2003. The MahaVitaran supplies electricity to 2.20 crore-odd consumers across all categories in Maharashtra.
The state is already groaning under Rs3.38 lakh crore loans and borrowings and the debt servicing burden amounts to an annual Rs27,000 crore. In addition, this year, it is supposed to repay bonds taken in 2000-01.
Mungantiwar said that apart from increasing mobilisation of resources and reducing wasteful expenditure, the state would also look at other sources of income. This included collection of fines from traffic offenders, which currently stands at just Rs562 crore and can be hiked to Rs1,000 crore without hiking the rates. The state will also look at areas where tax evasion takes place due to high rates of taxation.