Power Ministry is awaiting response from the Karnataka government on restructuring the debt of the state's discoms, before approaching the Cabinet Committee on Economic Affairs with the proposal. "As soon as Karnataka (government) sends us their response we will send the note to CCEA," an official in the Ministry of Power told PTI.
As per the proposal by the ministry, the state electricity boards of Jharkhand, Bihar and Karnataka will be allowed to convert their outstanding loans, till March 2013, into bonds as part of an amendment to the discom debt restructuring package.
At present, under the government approved Financial Restructuring Package (FRP), 50 per cent of the accumulated debt of the discoms till March 2012 can be converted into bonds to be issued by these distribution companies to the participating lenders, backed by state government guarantees.
This package was approved in September 2012 by the Centre in order to bail out the near-bankrupt discoms.
Karnataka along with Jharkhand and Bihar had approached the Ministry seeking this special provision.
Under the FRP scheme, balance 50 per cent loans will be restructured by providing moratorium on principal and best possible terms for repayments.
The support under the scheme is available for all participating state-owned discoms on fulfilling short-term mandatory conditions.
The government has also stated the debt recast should be accompanied by concrete and measurable actions by discoms or states to improve the operational performance of the distribution utilities.
The accumulated losses of state power distribution companies are estimated at about Rs 1.9 lakh crore as on March 31, 2011, and Rs 2.46 lakh crore as on March 31, 2012.
The debt recast plan for the discoms was formulated based on the report of an expert group headed by B K Chaturvedi, Member (Energy) of the Planning Commission.