Millennium Post

Govt package pushes power firms for higher tariff, annual revision

The centre said on Tuesday that its debt restructuring package for the state power distribution companies would be linked to increase in power tariff and performance of the electricity boards. 'Tariff rationalisation should take place annually,' the power minister Veerappa Moily told reporters here. The tariff order would be notified by 30 April of each financial year, he said.

'It is performance linked, and the SEBs should take concrete measures to improve operational performance,' Moily said. Under the debt restructuring package, the state governments should convert all its loans to equity and all the outstanding energy bills of the state departments or agencies as on 31 March 2012 are to be paid by 30 November 2012.

The scheme contains various measures required to be taken by discoms and state governments for achieving the financial turnaround of the discoms by restructuring their debt. 'The accumulated losses of the state discoms are estimated to be about Rs 1.9 lakh crore as on 31 March 2011 and Rs 2.46 lakh crore as on 31 March 2012,' the minister said.

Meanwhile, he said that the Ministry of Power would bring out a draft State Electricity Distribution Responsibility Bill after due inter-ministerial consultation within a period of 12 months from the approval of the scheme. States will enact the legislation within 12 months from the date of circulation of model legislation by Ministry of Power to mandate compliance of the provisions of the financial restructuring package, he said. Under the scheme, 50 per cent of the short-term outstanding liabilities would be taken over by state governments.
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