Discoms debt restructuring package to be performance linked

The Centre today said its debt restructuring package for the state power distribution companies would be linked to increase in power tariff and
performance of the electricity boards.

Also read: SEB losses pegged at Rs 2.46 lakh cr: Veerappa Moily

"Tariff rationalisation should take place annually," power minister Veerappa Moily told reporters here. The tariff order would be notified by April 30 of each financial year, he said. "It is performance linked and 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 March 31, 2012 are to be paid by November 30, 2012. The Cabinet Committee on Economic Affairs approved the scheme for financial restructuring of state distribution companies (Discoms) yesterday.

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 March 31, 2011 and Rs 2.46 lakh crore as on March 31, 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.