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infrastructure | IST

PFC-REC merger has dried up availability of funds for discoms, says Association of Power Producers

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In a meeting of the power producers last week, the key issues discussed were the nonpayment by discoms as well as the coal shortage. CNBC-TV18 spoke with Ashok Khurana, director-general of Association of Power Producers and Prashant Jain, joint MD & CEO of JSW Energy to get their views on the development.

In a meeting of the power producers last week, the key issues discussed were the nonpayment by discoms as well as the coal shortage. CNBC-TV18 spoke with Ashok Khurana, director-general of Association of Power Producers and Prashant Jain, joint MD & CEO of JSW Energy to get their views on the development.
“Today, outstandings of the private generation segment is at about Rs 40000 crore and out of which about Rs 16000-17000 crore power sold, Rs 7000 crore is for those orders, which have been made for change in law and discoms are not paying money and another Rs 17000 crore is under litigation because of deficit coal quantity we are getting from CIL and has not been made a pass-through for the last two years,” Khurana said on Tuesday.
According to Khurana, discoms are facing a deficit and hence cannot pay the dues and they have no liquidity to pay for the receivables. "Moreover, PFC-REC merger has dried up the availability of funds for discoms", he added.
Jain said, "As of now nothing is moving with regards to Samadhan Scheme because outside NCLT bringing a consensus among the lenders is a difficult task. So unless stressed assets move to NCLT there would be no resolution."
According to Jain, "Some of the things that can be done for the sector is that the sector is highly taxed, which has to be passed through to the consumers and therefore cost of purchase of power for discoms goes up and on the other hand there is no fiscal discipline in states, which creates a Catch22 situation. Therefore taxes need to be reduced".