BHUBANESWAR: The State-run power sector undertakings have been incurring huge losses despite infusion of substantial equity by Odisha government post power sector reforms.“At the aggregate level, the accumulated losses of the nine power sector PSUs was Rs 4,443.12 crore as against the capital investment of Rs 4,048.67 crore as on March 31, 2019,” said the audit report of Comptroller and Auditor General (CAG).
The audit report on economic and public sector undertakings for the year ending March 2019 tabled in the last day of Budget session of the Assembly on Saturday said Gridco, the bulk supplier of power to the State, had a negative net worth of Rs 3,853.75 crore. “Of the nine power sector PSUs, the net worth of Gridco had fully eroded (Rs -3,853.75 crore),” the report said. Net worth is the company’s sum total of the paid-up capital, free reserves and surplus minus accumulated losses and deferred revenue expenditure. Essentially, it is a measure of what an entity is worth to the owners.
A negative net worth indicates that the entire investment by the government has been wiped out by accumulated losses and deferred revenue expenditure.Apart from Gridco, the government continued to provide financial support to three other holding companies - OHPC, OPTCL and OPGC - by infusing equity during 2014-19. The accumulated losses of these power companies increased from Rs 1,920.21 crore in 2014-15 to Rs 2,382.51 crore in 2018-19.
As per the report, the government had made a total investment of Rs 15,403.27 crore in nine PSUs as on March 31, 2019. Of the total long term loans of Rs 11,354.6 crore, Rs 1,186.54 crore (10.45 per cent) was availed from the government and the balance Rs 10,168.08 crore (89.55 pc) was availed from financial institutions.
The outstanding guarantee commitments of the government increased by 47.60 pc from Rs 2,836 crore in 2017-18 to Rs 4,186 crore in 2018-19 as Gridco sought additional guarantee commitment to avail loans from financial institutions for bridging revenue gap left by OERC. The budgetary assistance received by these PSUs ranged between Rs 327.9 crore and Rs 1,072.75 crore during 2015-16 and 2018-19. Apart from budgetary assistance of Rs 327.9 crore given in 2018-19, the Green Energy Development Corporation of Odisha Ltd received Rs 10 crore grants for infrastructure development.
On return on equity (RoE), a measure to asses financial performance, the audit report said it was negative ranging from (-) 1.10 pc to (-) 336.94 pc during the period under assessment. The main reason for this negative RoE was the huge losses by Gridco in these years.
Fund flow
Rs 15,403.27 crore total investment in nine PSUs
Rs 11,354.6 crore total long term loans
Rs 1,186.54 crore availed from government
Rs 10,168.08 crore from financial institutions