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Sep 26, 2012, 03.07 PM IST
TN Thakur, chairman and managing director of PTC India is hopeful that the Tamil Nadu state electricity board (SEB) will clear all their dues by end of calendar year 2012.
"We had an over due of around Rs 1,750 crore from Tamil Nadu SEB, but they have liquidated significantly. Now only about Rs 400-Rs 500 crore is left," he told CNBC-TV18.
The Uttar Pradesh SEB also owes Rs 1,200 crore to PTC India and expects them to liquidate their dues soon. "UP has filed petition before the regulatory commission for increase in tariff . But that revenue itself will not be enough. The restructuring package will be quite helpful," he added.
Below is the edited transcript of Thakur's interview with CNBC-TV18.
Q: How much receivables do you have? If I remember right Tamil Nadu clearly owes you some money. How much are you owed at all from the SEBs?
A: We have outstanding only from Uttar Pradesh (UP) and Tamil Nadu. Tamil Nadu is clearing the dues by installments. I am hopeful that by the end of this calendar year they will be able to liquidate all the dues. UP has not started paying, but last week I was in Lucknow, I met the senior people and they promised me that very soon they will start paying and the dues will be liquidated.
UP also has filed petition before the regulatory commission for increase of tariff. I had a chance to meet with the regulatory commission officers also and they said that they were very soon going to increase the tariff for the consumers, which will give more revenue to the electricity board.
But that revenue itself will not be enough. I am sure that they will need some more assistance. In that context, the restructuring package which the government of India has announced will be quite helpful.
Q: What is the receivable exactly from Tamil Nadu and more importantly Uttar Pradesh at this point?
A: Uttar Pradesh we have over dues of around Rs 1,200 crore of which Rs 500 crore is to be paid to PTC and Rs 700 crore is to be paid to the suppliers of power through PTC. For this Rs 700 crore, we had an agreement with suppliers that we will pay to them only on receipt of payment from Uttar Pradesh.
So, that is not on our balance sheet, that Rs 700 crore but Rs 500 crore yes we have already paid to the suppliers and we are yet to receive from Uttar Pradesh.
As far as Tamil Nadu is concerned, we had an over due that’s around Rs 1,750 crore, but they have liquidated significantly. Now only about Rs 400-Rs 500 crore is left. So, that they have been telling us that by the end of this calendar year they will able to liquidate all the dues.
Q: Interesting you mentioned a UP hike. Hikes across SEBs have ranged between 5-40 percent, what's your sense of how much UP could raise by or what the potential talk is at this point?
A: I have a felling that in the first tranche they may not raise more than 25-30 percent. That is what most of state electricity boards are doing, that the regulatory commissions are doing they raise by about 20-25 percent.
Tamil Nadu was an exception which raised the tariff by 38 percent in the first tranche itself. So, my own feeling is that around 25-30 percent maybe the increase in UP, but it is for the regulators, they have not shared that number with me.
Q: What about the market itself, how have volumes panned out and what's your sense on how merchant prices are headed? Do you see them stabilizing moving higher?
A: The merchant prices will be more than today, if the SEB starts buying power. But because of the ill-financial positions of the SEBs they are not able to buy power. The retail market which is through open access has not yet picked up. We already have more than 120 customers who are buying power through PTC through the open access system that is the retail consumers.
120 is hardly a number, I am not really happy, but it is catching up. So, major buyers remain the state distribution companies. If their financial health improves, they will be buying power and won’t deny their consumers of electricity. Therefore, volumes will grow.
In that case, price will also go up. I personally feel that why should the price not go up because electricity is a commodity which costs money and if the prices of all essential commodities are going up, why the electricity prices should not go up? If you look at the electricity prices it is far below the inflation level. So that is why it is becoming unsustainable.
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