NEW DELHI: The Association of Power Producers (APP) has written to the Union Ministry of Finance seeking several relief measures to alleviate the pressures on the critical sector, including a Rs 1 lakh crore sector-specific TLTRO (targeted long-term repo operation) to ease liquidity concerns and a new policy framework that avoids unnecessary litigation.
In the letter, APP director general Ashok Khurana pointed out that orders issued by regulatory forums are routinely challenged as a matter of course, and that it was rare for directions on interim payment issued by regulatory commissions to be honoured.
The APP has consequently sought a policy framework where at least 75 per cent of the claim amount has to be paid before the party can file any appeals challenging the orders of regulatory commissions.“This becomes essential to stop frivolous appeals, provide some sanctity to the Orders of the tribunal/Commissions, eliminate the inordinate delay in realising the money and huge relief to the cash strapped infrastructure sector,” Khurana wrote.
As for the critical liquidity shortage arising from huge pending payments, the Centre had initially announced a Rs 90,000 crore liquidity support programme for discoms in May, which was subsequently hiked to Rs 1.25 lakh crore.
However, dues have continued to mount and as of the end of September 2020, discoms owed power producers close to Rs 1.26 lakh crore — up by a whopping 48 per cent compared to the last year. The APP had consequently requested the rollout of “a specific (targeted long term repo operation) TLTRO tranche of Rs 1,00,000 crore focused on Infrastructure companies with minimum investment grade rating” to help companies meet their capex requirements.
Industry seeks interest subvention scheme
GoI may provide an Interest subvention scheme for local manufacturers as this will help the banks to lend to such companies to revive local manufacturing which has been subdued over the last few years due to low demand from the power sector, APP said in a letter.