After Punjab Discoms agreed to revise the tariff plan for Tata Power's Mundra unit, the company expects its proposals for Gujarat, Rajasthan and Maharashtra to sail through soon, said Praveer Sinha, CEO and managing director. He further said that there seems to be a general consensus from all states with regards to Mundra tariff hike.
“Power sector has been going through huge challenges and we also continue to have few challenges in our business but there have been some good developments. We have seen that apart from Gujarat even Maharashtra cabinet notice ready and hopefully after the elections, it should go through,” said Sinha.
“Punjab, which initially had a lot of issues on the revision of the power purchase agreement (PPA), has agreed and the proposal is going to the cabinet and hopefully after the elections, this should happen. So generally all the states are coming on board and Rajasthan also is going through the process and various approvals are happening within the government system and Haryana has agreed to take it up after the elections,” he added.
Talking about cash flow, Sinha said, “The cash flow of the company has always been very good. There has never been any challenge in terms of receivables. We have been getting our payments regularly from all the states; leave alone 2 states who are going through huge Discom challenges.”
“All our existing generation units whether it is coal-based and the hydro plant and also our renewable projects have been getting payments within 30-45 days. Therefore, I do not think there is an issue as far as the cash flow of the company is concerned. The issue has been the high debt and that has been primarily because of Mundra,” Sinha added.
“Therefore, after the elections in 2 of the states - Maharashtra and Haryana, we expect the decision of the new government will come in December and thereafter the regulatory approval will come. So we expect that in last quarter of FY20 we should be getting the necessary approvals,” he further added.
We Expect Rs 500-600 crore additional inflow on account of Mundra tariff hike this year, said Sinha.
About asset sales, he said, “We are definitely looking at some of the asset sales especially international assets and we expect all those will start coming to us in next 6-12 months. Therefore, we are confident that we will be able to bring down our debt.”
Tata Power will close all acquisition documentation with regards to Prayagraj over the next few weeks, added Sinha.