Panel says discoms must pay late payment surcharge

A high-level panel for revival of stressed power companies has suggested the Ministry of Power to engage with power regulators to ensure that late payment surcharge is mandatorily paid to power producers in the event of delay in payment by electricity distribution companies (DISCOMs).

The panel headed by Cabinet Secretary P K Sinha also observed that the DISCOMs were unable to make timely payments to the generators due to their poor financial health. Besides, such delays has also led to generators facing liquidity crunch.

The Ministry of Power has identified 34 coal-based thermal power projects, mostly private with a total capacity of 40,130 MW, were identified as 'stressed.'

The non- performing assets (NPAs) in power generating accounts which include coal, gas and some of hydro power projects, for around 5.9% of the banking sector's total outstanding advances of Rs 4.73 lakh crore.

The poor payment records of the DISCOMS has not only adversely hit the power producing companies but also contributed to stress in the banking sector. The NDA government has been working on series of measures to boost the electricity demand and address the crises faced by the power generating as well as distributing firms.

The government formed a panel headed by the Cabinet Secretary to review these projects in which secretaries including Finance, Power and Coal are members.