Resentment against Tangedco mounts
Tamil Nadu Generation and Distribution Company (Tangedco), the State-owned utility, will end 2011-12 with a ‘payment deferral’ of Rs 11,500 crore. Most of the dues are to power producers who have sold electricity to Tangedco.
The utility is deep in the red with an estimated loss of Rs 14,496 crore in 2011-12, a number that would take its accumulated losses to Rs 54,538 crore.
Resentment is building against Tangedco (but really against the State Government), over the mounting dues, as Independent Power Producers are being driven to bankruptcy as Tangedco is not paying them the dues.
Ind Bharat, has filed a ‘winding up’ petition against Tangedco.
The Rs 200-crore Orient Green Power, a listed company, needs to get Rs 30 crore from Tangedco. Dues are pending for over nine months, it is learnt.
Indowind, a Rs 47-crore company, needs to be paid close to Rs 7 crore. Incidentally, this company is facing redemption pressure from its FCCB holders and needs to get ready $30 million in quick time. Business Line haslearnt that one IPP, which uses furnace oil-fired gensets, has to get Rs 280 crore from Tangedco and thanks to this, is tottering on the verge of bankruptcy.
INVESTORS FLEEING STATE
Many other investors have dropped their plans of putting up projects in the State, after looking at the financial situation of Tangedco. Some examples are Techno Electric and CLP, who have dropped or pared their plans for investing in the State.
“The past few years we had been seeing an increase in investment under the preferential tariff PPA with Tangedco . However, with the current situation in the State, we are seeing potential investors rushing to States like Maharashtra, Rajasthan, Karnataka and even Andhra Pradesh,” said Dr V. Bapeshwar Rao, Vice-President – Business Development (India), Suzlon.
Suzlon, India’s biggest wind turbine manufacturer, which also develops wind farms and sells windmills in the farm to investors, has been facing the ire of its customers in Tamil Nadu, though for no fault of it.
The situation is dire because Tangedco is already sitting on a debt of Rs 45,000 crore. In internal documents viewed by Business Line, Tangedco has said that financial institutions such as Power Finance Corporation, Rural Electrification Corporation and various banks are “reluctant to provide financial assistance and insist on return of loans.” They also want Government guarantee for fresh loans. Tangedco estimates its ‘additional cash flow requirements’ at Rs 1,500 crore a month.
“The financial health of Tangedco is definitely a matter of concern, not only for the wind energy but for the power sector in general,” Dr Rao told Business Line.
“Unless the distribution companies start working like a corporate body, we do not expect the present situation to change much,” he said.
Source: Hindu Business Line