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Home News Power Sector News To tide over crisis, Maharashtra mulls selling off power assets

To tide over crisis, Maharashtra mulls selling off power assets

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MaharashtraDesperate to revamp the prevalent electricity scenario in Maharashtra, the Devendra Fadnavis government is looking at offloading some of its electricity assets, both in the generation and distribution sector. Confirming this, state's Power Minister Chandrasekhar Bawankule said the government would first re-evaluate the value of assets of the state-run power companies.

He said the move to monetise certain assets was being considered to overcome the debt burden in the power sector. The state's power generation arm Mahagenco has amassed losses worth Rs 5000 crore, whereas the distribution arm Mahadiscom has losses totalling nearly Rs 15,000 crore.

Sources in the power ministry said the government was considering the option of monetising 10 per cent of its assets.
For 2013-14, Mahagenco had valued its assets at over Rs 28,000 crore, but Bawankule said the government would be re-evaluating the same.

To improve the ease of doing business in Maharashtra, the state government is keen to reduce the power tariff for industrial consumers, which is higher than competing states like Gujarat and Karnataka. The government has set its eyes on reducing this by at least 25 per cent through various initiatives.

Bawankule said mopping up revenue through monetization to decrease the debt burden was also a part of this reform.

Sources, meanwhile, informed that the government is expecting that public sector giant, the National Thermal Power Corporation (NTPC), which is cash rich and also seeking to augment its generation and capacity, would evince interest in buying these stakes.

Sources, however, said that the NTPC's first preference would be green field power projects.

Deliberations in this regard have been carried out with Union Power Minister Piyush Goyal.

There are various models of valuing power assets. These include valuing assets on the basis of the cost incurred at current values and affixing their value on their depreciation value.

Source- Indian Express

 

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