A high-level team of electricity department officials which met Union Power Minister Piyush Goyal in New Delhi on Friday to discuss the UDAY scheme claimed it has received a positive response on certain modifications requested by Chief Minister Jayalalithaa as a precondition for coming under the ambit of the scheme.
Mr. Goyal, who met the team led by the Electricity Minister, P. Thangamani, later said that Tamil Nadu has in-principle agreed to join the scheme.
UDAY (short for Ujwal DISCOM Assurance Yojana) is a financial turnaround and revival package for electricity distribution companies (DISCOMs) initiated by the Centre.
The Union Power Minister told The Hindu that the mood of the meeting with the State Electricity Minister was positive. "We have to go to the Cabinet for approval. The State has to join the scheme by December, so that they can issue the bonds by March," Mr. Goyal said.
A senior official of the Tamil Nadu Generation and Distribution Corporation (TANDEDCO) said that except for the relaxation of the Fiscal Responsibility and Budget Management (FRBM) target, the Central government has accepted all the conditions put forth by the Chief Minister, Jayalalithaa, in her letter dated October 23 last year.
The official said the meeting was in continuation of Chief Minister's assurance to send a team to meet Union Power Minister Piyush Goyal when he visited Chennai on July 15.
Ms. Jayalalithaa had, in her letter, sought five main modifications including relaxation of FRBM norms for the entire bond period of 15 years.
Other demands include nod to float 15-year bonds with a five-year moratorium; provision of 25 per cent grant by the Central government in the financial restructuring plan (FRP) similar to the FRP implemented in 2012; and provision of 50 per cent cash-loss financing by commercial banks for the next five years (for DISCOMS).
The Union government has also agreed to dispense with the quarterly revision of tariff to offset fuel price changes, which is one of the main provisions in UDAY scheme.
Among the other important issues that were discussed in the meeting were the release of a loan of Rs. 3,000 crore by Power Finance Corporation; setting up of a dedicated inter-State green energy corridor; and provision of grant of Rs. 150 crore to TANTRANSCO by the Ministry of New and Renewable Energy for installation of capacitor banks and reactors for compensation/consumption of reactive power.
Source- The Hindu