Wednesday, February 21, 2024

Centre’s unusual step in clearing power debt


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New Delhi/ Shillong, May 11: The cash-strapped Meghalaya, unable to clear its power debts in the market, has found an unlikely way to liquidate its financial liabilities to power generating companies. On request, the Centre has decided to come to its rescue by directing the Reserve Bank of India to “debit” a whopping Rs 370.99 crore from its consolidated funds towards paying up NEEPCO for ensuring uninterrupted power supply, at least for now.
The proposed debited amount will be transferred to its central government’s account for onward transfer to NEEPCO towards arrear dues from power purchaser MePDCL. The MePDCL is itself in acute financial crisis and has defaulted in payment of arrears to many power producers and distributors with which it had signed agreements earlier.
The Centre also accused the state government of non compliance of the Tripartite Power Agreement (TPA) between the Centre, the State and the RBI since it is not making regular payment of outstanding bills in time. “The Government of India has decided to invoke provisions of the TPA and served a notice to the State Government to ensure payment of the undisputed outstanding dues of Rs 370.99 crore payable by MePDCL to NEEPCO within 15 days,” it said.
In case MePDCL fails to make payment within the given timeline, the Government of India shall invoke the provisions of TPA and recover the outstanding dues of Rs 370.99 crore in three equal instalments of Rs 123.66 crore each, on monthly basis, from the state government account, the notice issued by the Ministry of Power said.
Accordingly RBI will be requested to debit a sum Rs 123.66 crore each in May, June and July of this year from the account of the state government being maintained by the RBI. The deducted amount will be credited into the account of Government of India for onward transfer to NEEPCO.
MePDCL CMD Arunkumar Kembhavi confirmed the arrangement saying that “I had gone personally to visit senior officials in Delhi last week of April, got a breather for another three weeks and I am confident that NEEPCO will get its dues by the deadline.”
Mentionably, NEEPCO has been supplying power to MPDCL as per PPA signed in 2018. But the latter has not been making regular payments for the past few years resulting in accumulation of huge outstanding dues compounded by late payment fees.The GOI in its letter to RBI pointed out that the MePDCL has availed a loan of Rs 1345.72 crore from the REC Ltd and Power Finance Corporation Ltd under Atma Nirbhar Bharat Abhiyan package for payment of outstanding loans. But MePDCL paid two instalments but failed to pay the last one of Rs 370.99 crore due to which NEEPCO is facing acute liquidity crunch, it pointed out.
Incidentally, the District Commercial Court of Shillong had stayed the move of the National Thermal Power Corporation to regulate the supply of power in the state from May 11 due to non-payment of dues by the state.


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