As Modi 2.0 hits the ground running, the power ministry has formulated a 100-day plan to re-energise the space. The power ministry also directed states to honour all clearances to power companies. But the big question is: Would this move the needle for the beleaguered sector? And from where would these payments be made?
To get an answer to the above questions
CNBC-TV18 spoke with Arvind Singh, principal secretary, department of energy, Maharashtra, and Vishwas Pathak, director, Maharashtra State Power Generation Co.
Singh said, “As far as dues are concerned it is a state-specific issue and in states where there is financial discipline in working of the discoms and which have a good track record of payment, I don’t think there should be any problem in finding dues. There would be resources to pay the dues.”
However, the problem would be in states where there have been financial stress on the discom side as well. “As far as Maharashtra is concerned once we get the directive, I don’t think will be any problem at all because we don’t have any large overdues to generating companies,” said Singh.
Talking about the concept of creating a power council in the 100-day plan, which could be like replicating the GST Council, Singh said,” I haven’t gone through the fine print but if there is an analogy with the GST Council, it will ensure a better coordination between the Central and the State government, possibly the Centre could nudge states on finding the resources through its budget or hitting early clearances for tariff revisions from their regulators, stuff like that which will ease the financial situation in the states where generating companies are facing trouble from the discoms.”
Pathak said he would concur with Singh’s views. The circular is mainly talking about how to help stress assets. “While punishing the wrongdoers and defaulters this government is also trying to get back the NPAs into performing assets so that more employment can be generated and revenues can be collected,” he added.
While setting up any power plant there is a lot of visibility, viability, then coal-linkage, water linkage issues, government clearances, PPAs etc is there and we need financial closure also, said Pathak, adding that just because of financial mismanagement all such approvals and licenses in place remain intact.
“So the idea is to transfer those clearances and licenses to other parties even if there is a change in guard to NCLT and Insolvency & Bankruptcy, this is a very good move wherein non-performing assets can become performing assets immediately giving a boost to GDP and employment generation,” said Pathak.Pathak further said, Maharashtra has got adequate PPAs in place and they are power surplus, so there is no load shedding and the power dues are being paid by discoms to generating companies. “Maharashtra is a well-managed utility,” he said.