6 states agree to financial recast of power discoms

Published: 29th March 2013 09:51 AM  |   Last Updated: 29th March 2013 09:51 AM   |  A+A-

Six states — Andhra Pradesh, Bihar, Haryana, Kerala, Tamil Nadu and Uttar Pradesh  — have agreed to financial restructuring plan of their state power distribution companies (discoms) as suggested by the Centre, Power Minister Jyotiraditya Scindia said on Thursday.

Keeping in mind the mounting debts of state-run distribution companies that have cumulative debts to the tune of over `2.6 lakh crore, the Centre had in last October announced a financial restructuring plan to help these companies out of red.

The Centre had agreed to recast debt to the tune of `1.5 lakh crore debt of the state electricity boards. It also agreed to take over 50 per cent short-term liabilities of discoms by respective state governments, as was suggested in the plan by the state governments.

Incentives such as re-reimbursement of 25 per cent of discom debt taken over by the state government are part of the scheme.  However, the Ministry of Power has not given specifics regarding re-reimbursement of debt burden to the states.

As per the financial recast plan, the Centre would provide 25 per cent capital reimbursement of principal repayment by the respective state government on the liability taken over by it.

The last date for the states to register for the recast plan may be extended from the current March 31.

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