Friday, Mar 21, 2003
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By Our Special Correspondent
NEW DELHI, MARCH 20. Marking a major forward movement in terms of power sector reforms, 24 States today signed a tripartite agreement with the Central Government and the Reserve Bank of India to clear dues worth Rs. 37,400 crores owed to Central utilities under a one-time settlement scheme worked out by the Montek Singh Ahluwalia panel almost two years ago.
The biggest beneficiary of the dues clearance exercise will be the National Thermal Power Corporation that will get back about Rs. 19,000 crores (net of surcharge waiver) through bonds to be issued by the States. The total outstanding of State electricity boards (SEBs) towards power Central utilities such as NTPC, NHPC, Powergrid and coal companies worked out to Rs. 37,400 crores as on September 2001.
According to the one-time settlement scheme, the entire principal amount and 40 per cent of the interest on that would be securitised in the form of RBI bonds on behalf of the respective State governments with a tenure of 15 years. There would be a moratorium of five years for redemption of bonds. Of the bonds issued in favour of Central utilities, only 10 per cent of them can be traded in the market every year. The bonds will carry an interest rate of 8.5 per cent and the interest will be tax-free.
The agreements were signed here today in the presence of the Union Power Minister, Anant Geete, who said the move would mark the beginning of key reforms in the power sector. "From now on, it will be the responsibility of SEBs to improve their financial position,'' he said. The Union Power Secretary, R. V. Shahi, said the development would help some SEBs turn around within three years and others in five years.
Later, talking to presspersons, the NTPC Chairman, C. P. Jain, said the agreement would benefit not only the Central utilities but also the SEBs.
As the States were responsible for nearly 70 per cent of the power generation, clearing of old dues would provide leverage to the SEBs to finance their projects further, Mr. Jain said.
For dues after September 2001 totalling about Rs. 3,000 crores, Mr. Jain said the NTPC had entered into an agreement with most States and the dues were likely to be cleared soon.
Among the States left out of the agreement, Delhi has agreed `in-principle' to do so but the agreement is yet to be signed. Others who have not yet conveyed their consent for signing of the tripartite agreement include Arunachal Pradesh, Mizoram, Tripura and Manipur.
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