At ₹175.29 billion, Tamil Nadu had the 2nd highest amount of overdue payment, ₹149.11 billion of which was overdue for over 60 days, as per the data from the Ministry of Power’s payment ratification and analysis portal (PRAAPTI).
CHENNAI, August 17: Struggling to pay interstate power producers and central generating stations (CGS) after the drastic reduction in consumption charges collection from the end of March 2020 due to the COVID-19 pandemic, state power distribution company, Tamil Nadu Generation and Distribution Corporation Limited (Tangedco) has sought a relief package of ₹32,682.65 crore through power lending agencies.
TN had the second-highest amount of overdue payment at ₹175.29 billion, as per the data from the Ministry of Power’s (MoP) payment ratification and analysis portal (PRAAPTI), of which ₹149.11 billion has been overdue for over 60 days (form March to May), impacting the payment to IPPs and CGS.
The Union government had announced a special COVID-19 financial assistance package worth ₹90,000 crore through power lending agencies Power Finance Corporation (PFC) and Rural Electrification Corporation (REC), Tangedco officials stated, leading them to submit a ₹20,622 crore proposal to cover the dues of the generators including renewable energy generators upto March 2020. A revised proposal had recently been sent to the power lending agencies during a meeting with the state minister for power and renewable energy and Chief Minister to include the dues till June 2020 amounting to ₹32,682.65 crore.
“The proposal is under active consideration of lending agencies and as soon as the financial assistance is sanctioned, the pending payments will be cleared to power generators.” Tangedco official sources stated.
As a short term relief measure, the Union power ministry has instructed the DISCOMs for at least 50% payment of monthly dues during the period from March to August which Tangedco has complied with and has paid the total outstanding amount of ₹6279.65 crore and ₹10,382.40 crore respectively towards IPP and CGS for the period up to June.
It is learnt that a few of the IPPs had written to Tangedco for encashing the Letter of Credit (LC) that had been provided after the MoP’s intervention last year in July if payment was not released to them promptly.
As per the Ministry of Power instructions to maintain payment security to the power generators, Tagedco has ensured that LC is provided to IPPs and CGS from this month onwards, a Tangedco spokesman said.
Since August 2019, Tangedco has been making payments on a monthly basis and there have been no arrears to power generators from August 2019 to January 2020. The pending payment to the power generators prior to August 2019 had been planned to be discharged by availing a special financial assistance package which the Union government intended to provide through the PFC and REC.
It is to be noted that the power distribution companies across India are in a bad shape. DISCOMS losses have grown bigger than earlier estimates, recent audit reports suggested. Data from the Ministry of Power’s (MoP) payment ratification and analysis portal (PRAAPTI) revealed that 65 DISCOMs owing ₹1.199 trillion in overdue payments to 197 power generators. Rajasthan had the highest overdue payment at ₹349.37 billion among them.
DISCOMS are currently plagued with a range of issues such as operational inefficiency, unrealistically low tariffs and sharp fall in industrial power demand, affecting their ability to pay power suppliers on time, putting huge financial stress on generators.
