Loan averts power crisis

Discoms' inability to pay NTPC threatened blackout

A feared power crisis that threatened to plunge large chunks of Delhi into darkness from June 1 appears to have been averted.

Now, the private distribution companies’ inability to pay NTPC may not result in disruption of power supply as the power regulator is helping them get loans from a central agency to clear the dues.

“The BSES companies have sought a loan of Rs 8,000 crore from Power Finance Corporation and other lenders to pay the NTPC and bridge their revenue gap,” said a Delhi government official.

 Sources in the government said the power cuts might be averted but there were strong indications from the regulator about a tariff hike in the coming weeks to shore up the bottom line of financially stressed power companies. 

The Reliance-controlled BSES power companies – Rajdhani and Yamuna – owe around Rs 1,200 crore to the National Thermal Power Corporation (NTPC). The parties have also been engaged in litigation over the dues.

The NTPC had set a deadline of May 31 for recovery of dues from the BSES companies and threatened to discontinue power supply.

According  to sources in the Delhi Electricity Regulatory Commission,  the Rs 1,200 crore that the BSES companies are expected to repay the NTPC would just be a part of the loan they are seeking to make up for the revenue under recoveries.

Assurance to lenders

The DERC also played a role in assuring the power companies’ prospective lenders about the feasibility of a seven-year plan to help the BSES companies to recover Rs 8,000 crore revenue sources said. 

Apart from the BSES companies, Tata power, the third private power company, would also get the benefit of the power regulators’ assessment that the three power companies have suffered losses of about Rs 11,400 crore due to delay in timely revision of tariffs in the last few years.

Till 2011-12, the revenue gap of all the three discoms BSES Rajdhani, BSES Yamuna and Tata Power stands at a whopping Rs11,400 crore.

According to a discom official, other lenders that they were approaching for loans included the Rural Electrification Corporation, IDBI Bank and State Bank of India. Earlier this month, Lieutenant Governor Najeeb Jung had assured that there was nothing to fear about a power blackout on June 1.

Jung said a solution to the payment tangle between discoms and the NTPC would be found. “There will never be a total blackout in the capital,” he said.