NEW DELHI:With the Centre failing to come up with a solution for stressed power companies and finance companies already initiating resolution proceedings against defaulting power projects, the power sector has demanded a bailout package and help for projects that are stuck for want of funds.“So far, there is no consensus arrived at regarding the power sector loans. The sector representatives have once again requested the Finance Minister to help out with a bailout package to save stalled power projects. The Finance Ministry is already working on it and will prepare a plan in consultation with the power sector, banks and PMO,” a senior official told TNIE.
The power sector approached the government once again after independent power producers faced a setback from the Allahabad High Court, which on July 18 refused to stay the implementation of the controversial February 12 circular by Reserve Bank of India (RBI).
What was more damaging was that the government has not even filed a report on the stressed assets, failing which the court has given two weeks time before taking a final stand. Staying the RBI circular for a month from May 31, the court asked the Finance Ministry to call all related parties to resolve the situation of stress in power companies. However, the sector has got no relief.
Meanwhile, Power Finance Corp has already initiated resolution proceedings against defaulting power projects as per the RBI circular and is expected to conclude the process before August 27.The sector, which is reeling under stressed assets worth `2 lakh crore, says the RBI circular will not only kill many power companies, but also stall several large projects. They have therefore reached out to Finance Minister Piyush Goyal, who was himself the power minister formerly.“The minister is working on the solution. He is likely to hold a meeting with all the stakeholders soon. The time of the meeting is not decided yet,” the official said.
Rs 2 L cr worth assets in the power production sector currently reeling under stress