logo

Power producers seek TReDS to clear dues worth Rs 41,240 cr

Power producers seek TReDS to clear dues worth Rs 41,240 cr

Mumbai: Private power producers have urged the government to consider extending the trade receivables discounting system (TReDS) applicable for MSMEs to them to help resolve their payment woes, which are to the tune Rs 41,240 crore.

In a letter to power secretary Ajay Kumar Bhalla, the Association of Power Producers Friday said delay in recovery of receivables, especially regulatory receivables, has created stress on their finances as it impacts their ability to service debt and severely restricts working capital liquidity.

According to the letter, as of end January 2019, the amount of receivables due from discoms is to the tune of Rs 41,240 crore, of which dues from sale of power are around Rs 17,246 crore, while dues stuck in litigation are worth Rs 17,128 crore and nearly Rs 6,865 crore of receivables are pending despite adjudication.

"We urge the Union power ministry to take expeditious action on this issue to help avoid create more NPAs and to ensure the availability of adequate power during the summer which is also the election season," APP director-general Ashok Khurana said in the letter. He further said since the government has taken measures to address the receivables situation for MSMEs through the TReDS, extending the same to them will be of immense help. Moreover, the RBI has also issued guidelines for implementing the system.

"We believe a similar system would greatly ease current stress on private power producers and we request the ministry to consider implementing the same for us as well," Khurana said. It may be recalled that the power ministry had suggested a similar system to the empowered committee, which had proposed formulation of a proposal for tri-partite agreement for discounting bills of power producers.

A senior official at a private producer said if the discoms are unable to make timely payments, it will severely impact the sector in the long-run.

"Nearly 25,000-mw capacity has receivables of over Rs 41,000 crore. Also, nearly Rs 3 lakh crore of bank funds are stuck in these projects.

"On top of it, discoms, due to mostly political reasons, have not been able to raise tariffs or improve recoveries. Unless the government takes prompt steps, there will be a situation when there will be no power as generators will not be able to produce due to liquidity crisis," he said.

He said IPPs have to make advance payments for to Coal India for fuel as well as to the Railways for shipment.

"Coal India's production has increased significantly this month, but if we don't have money how will we procure coal and if we dont procure coal, how will we run our plants? So it is important that payments are on time," he added.

The Reserve Bank has identified as many as 34 financially stressed power projects with loans of over Rs 1.8 lakh crore at risk of becoming NPAs. The matter is pending before the Supreme Court.

PTI

PTI

Our contributor helps bringing the latest updates to you


Share it
Top