Gridco uncertain over discoms loan recovery

BHUBANESWAR: Even after the second phase reforms in the power distribution sector, the state government has not been able to recover loan dues amounting  to Rs 2,000 crore from the discoms. After the initial power sector reforms, the state-owned Grid Corporation (Gridco) had taken a loan of Rs 471.27 crore from the World Bank for infrastructure development in the power sector. The loan amount was transferred to the distribution companies - Cesco, Wesco, Nesco and Southco - after their privatisation.

The loan share of Cesco was Rs 204.51 crore, Wesco Rs 102.89 crore, Nesco Rs 91.28 crore and Southco Rs 72.59 crore.After AES abandoned Cesco, the management of the company was handed over to Gridco, which acted under the supervision of the Odisha Electricity Regulatory Commission (OERC). The remaining three distribution companies (Discoms) were handed over to Reliance Energy Limited (REL), which later became Reliance Infrastructure. However, OERC was stripped off the distribution license from Reliance Infrastructure for violating the license agreement.

The erstwhile Cesco is reported to have repaid Rs 11.92 crore of the Wold Bank loan to the State government while the other three companies had not made repayment till the four discoms were privatised for the second time and their management handed over to Tata Power Company Limited (TPCL).
As the four discoms were under financial stress and not able to infuse funds for sectoral development, the State government arranged financial assistance in shape of loan from the Centre under the Accelerated Power Development and Reforms Programme (APDRP).

An amount of Rs 541.62 crore under APDRP was extended to the four discoms and the major share of Rs 380.93 crore was extended to Cesco, Rs 148.85 crore to Southco while Wesco and Nesco received Rs 5.47 crore and Rs 6.37 crore respectively.With Tata Power at the helm of power distribution, the total outstanding against the company has increased to Rs 849 crore including interest.

Similarly, the loan under capital expenditure (Capex) from the State government has increased from Rs 564.88 crore to Rs 659.33 crore. The bulk of the outstanding amount of Rs 350.75 crore is pending against TPCODL while outstanding against TPWODL and TPNODL is Rs 178.7 crore and Rs 111.42 crore respectively.With the sale of the distribution licenses, Gridco has expressed uncertainty in realisation of past dues from Discoms. Prior to privatisation, Gridco had escrow mechanism for recovery of dues which is no more the case.