The Telangana government has in principle decided to join Centre's Ujwal Discom Assurance Yojana (UDAY) to aid ailing electricity distribution companies.
It was precisely because the State government had not given clarity on UDAY that the two power distribution companies of Telangana had last week sought time with Telangana State Electricity Regulatory Commission up to March 4 to file their annual revenue requirement.
The chairman and managing director of Telangana State Generation Corporation D. Prabhakar Rao said that Chief Minister K. Chandrasekhar Rao had given a commitment to Union Power Minister Piyush Goyal to join the scheme during Mr. Rao's recent visit to New Delhi. UDAY envisaged that the State governments will take over 75 per cent of the debt held by Discoms as on September 30, 2015.
The rest 25 per cent of the debt is to be serviced through State government guaranteed bonds issued by Discoms.
The Discom bonds will be issued at coupon rates 3 to 3.5 per cent lower than the average existing interest rate of 12 per cent, according to Energy Secretary Arvind Kumar. He said the Telangana government will enter into a memorandum of understanding with Centre in March after the outstanding liabilities of the Discoms were worked out.
Telangana and Andhra Pradesh are among eight States that hold majority of overall debt held by power utilities to a tune of over Rs. 3 lakh crore. The accumulated losses of the two Discoms in Telangana till March 31 last year were Rs 13,866 crore while the projections of accumulated losses were Rs 16,198 crore in 2015-16, Rs 20,190 crore (2016-17), Rs 24,316 crore (2017-18) and Rs 29,398 crore (2018-19).
Source- The Hindu