Government of Meghalaya has had to concur to the Power Ministry’s conditions to outsource the power distribution to a franchisee in order to avail the second tranche of the Atman Nirbhar loan of Rs 672.86 crore for debt servicing accumulated over the years. To infuse liquidity into the cash strapped MeECL the Corporation had applied for loan from the Atma Nirbhar Bharat Abhiyan scheme of Government of India. MeECL needs liquidity to clear liabilities of Central Public Sector Enterprise (CPSE) Power Generating Companies, Transmission Companies, Independent Power Producers and Renewable Energy Generators (RE Generators). The conditions for availing the Atma Nirbhar loan, includes among other clauses, that MePDCL show a revenue model for repaying the loan. That requires significant structural changes paramount among which is handing over the power distribution verticals in East, West and South West Khasi Hills, to the Distribution Franchisee – RECPDCL. The MoU with Ministry of Power was recently signed where MePDCL has to undertake to submit half yearly reports regarding the details of the excess cash flow generated by the Distribution Franchisee (RECPDCL). In case the same is not sufficient to pay up 25% loan (Principal, interest and other obligations), MePDCL will have to provide details of alternate means of repaying its debt to REC/PFC.
The Power Ministry had insisted that the Agreement and undertaking from the MePDCL for structural reforms should be submitted and assented to, before the 2nd tranche of loan is disbursed. Considering MeECL’s past history of default on loan servicing this undertaking from the Corporation is seen as imperative. MeECL has been in debt since the 1990’s and attempts were made even then to bring in private parties to tackle the distribution sector which is the problem area, what with hugely subsidized cost per unit of electricity, power thefts and poor management of the billing system. But politics had always been the bogeyman. And now politics has taken a grip, aided and abetted by a section of MeECL employees whose concern for their own security overrides all other public concerns. Things have come to a flashpoint where harsh measures are needed.
Interestingly, the MDA partners appear to be influenced more by what political points they can score than in engaging on how to rescue the debt ridden MeECL. As always, appeasing their constituents and vested interests trump the overall interests of the State. They can neither tolerate load shedding nor do they want power sector reforms. But a time has come for them to take a call or quit the Government. The Opposition Congress cannot even squeak on this since they had made some of the worst decisions vis-a-vis the power purchase agreements that now hang like the Sword of Damocles.
