Power minister to meet state energy ministers
5 Feb 2013 6:32 AM IST
Power Minister Jyotiraditya Scindia will meet state energy ministers on Tuesday to deliberate on better and speedy implementation of the financial restructuring plan to bailout ailing electricity distribution companies.
Last year, the Union government announced restructuring the Rs 1.9 lakh crore debt (as on 31 March 2011) of nearly-bankrupt power distribution companies in an attempt to improve their financial health. According to the proposal, 50 per cent of the outstanding liabilities of the discoms would be taken over by the states.
Remaining 50 per cent loans would be restructured by providing moratorium on principal and best possible terms for repayments.
The debt will be first converted into bonds to be issued by discoms to the participating lenders and it (bond issue) would be backed by state governments. The scheme, however, is yet to be notified. The timeline for the states' response has now been extended to 31 March 2013. Under the scheme, the support will be available for all participating state-owned discoms on fulfilling short-term mandatory conditions. The restructuring of loans is to be accompanied by concrete actions by discoms or states to improve operational performance of the electricity distribution utilities. The scheme also stated that the takeover of debt by the states from discoms in the next 2-5 years by way of special securities and repayment and interest payment should be done by them (states) till the date of takeover.
The approved scheme is formulated on report of expert group headed by B K Chaturvedi, Member Planning Commission and deliberations in the PMO and Finance Ministry.
CCEA MAY TAKE UP COAL PRICE POOLING MECHANISM
The government is expected to soon announce a mechanism for price pooling of coal - blending the cost of domestic fossil fuel with the imported one to offset high price, sources said.
'Cabinet Committee on Economic Affairs (CCEA) is likely to consider a note on price pooling mechanism on Tuesday,' a senior government official said.
The Coal Ministry last week had circulated a Cabinet note on price pooling mechanism inviting comments from various ministries —Power, Steel, Shipping, Railways and Planning Commission among others.
Earlier, the Power Ministry had suggested to the Coal Ministry that the difference in cost of imported and domestic coal should be added to the cost of indigenous fuel at the time of finalising proposal for pooling coal prices. The Planning Commission was of the view that to offset the impact of high import costs, Coal India should adopt a pooling formula.
Last year, the Union government announced restructuring the Rs 1.9 lakh crore debt (as on 31 March 2011) of nearly-bankrupt power distribution companies in an attempt to improve their financial health. According to the proposal, 50 per cent of the outstanding liabilities of the discoms would be taken over by the states.
Remaining 50 per cent loans would be restructured by providing moratorium on principal and best possible terms for repayments.
The debt will be first converted into bonds to be issued by discoms to the participating lenders and it (bond issue) would be backed by state governments. The scheme, however, is yet to be notified. The timeline for the states' response has now been extended to 31 March 2013. Under the scheme, the support will be available for all participating state-owned discoms on fulfilling short-term mandatory conditions. The restructuring of loans is to be accompanied by concrete actions by discoms or states to improve operational performance of the electricity distribution utilities. The scheme also stated that the takeover of debt by the states from discoms in the next 2-5 years by way of special securities and repayment and interest payment should be done by them (states) till the date of takeover.
The approved scheme is formulated on report of expert group headed by B K Chaturvedi, Member Planning Commission and deliberations in the PMO and Finance Ministry.
CCEA MAY TAKE UP COAL PRICE POOLING MECHANISM
The government is expected to soon announce a mechanism for price pooling of coal - blending the cost of domestic fossil fuel with the imported one to offset high price, sources said.
'Cabinet Committee on Economic Affairs (CCEA) is likely to consider a note on price pooling mechanism on Tuesday,' a senior government official said.
The Coal Ministry last week had circulated a Cabinet note on price pooling mechanism inviting comments from various ministries —Power, Steel, Shipping, Railways and Planning Commission among others.
Earlier, the Power Ministry had suggested to the Coal Ministry that the difference in cost of imported and domestic coal should be added to the cost of indigenous fuel at the time of finalising proposal for pooling coal prices. The Planning Commission was of the view that to offset the impact of high import costs, Coal India should adopt a pooling formula.
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