Haryana 11th. state to join bailout plan for Discoms

Haryana 11th. state to join bailout plan for Discoms
Tuesday December 15 2015
Haryana became the 11th. state in the country to join the bailout scheme for reviving debt- laden two power utilities. Earlier 10 other states that communicated their in-principle approval to the Power Ministry for joining the UDAY scheme . These are Andhra Pradesh , Jharkhand , Rajasthan ,Himachal Pradesh, Uttrakhand , J&K Chhattisgarh, Punjab and Gujarat.
Power and Coal Minister Piyush Goyal tweeted , “Congratulations to CM Manohar Lal Khattar on Haryana joining Ujwal DISCOM Assurance Yojana”
The scheme is optional and gets operationalised by signing a pact between states, state Discoms and the Centre. In Haryana billing efficiency is around 73%,revenue collection efficiency of 91% and AT&C losses are in range of 34%.In case Punjab is able to bring down AT&C losses to 15% by 2018-19 the saving would be around Rs. 5391 crore.
Haryana has been increasing average tariff hike of 10% for the last few years which is higher than national average tariff hike but tariff hike is not the real solution
Last week Punjab joined the government of India scheme “UDAY” to set right the stressed loans of Punjab State Power Corporation Limited (PSPCL)
As per the scheme, state governments are to take over 75 per cent of the debt of Discoms as on September 30 in two years and payback lenders by selling bonds. For the remaining 25 per cent, Discoms will issue bonds. The states will share future losses of Discoms in a graded manner.
It has been claimed by the government that the Scheme UDAY has been launched to improve financial and operational efficiencies of power distribution companies . Further it envisages to reduce interest burden, cost of power and AT&C losses. This is yet another attempt to bailout power sector distribution companies through financial restructuring of stressed loans.
V K Gupta Spokesperson of All India Power engineers federation said that the failure of last two financial packages announced by the previous governments was due to fact that there was no mechanism to monitor the performance of states who joined the schemes. Haryana in 2012 had joined the last financial restructuring but without any success due to lack of political will. Key to the success of the scheme is acceptance and implementation by state governments


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