NEW DELHI: Overdues of central generation companies (gencos) have dropped to Rs 35,314 crore in August from Rs 49,780 crore a year after the power ministry invoked tripartite agreements with defaulting states and the RBI to recover outstanding amounts and asked power plants to snap supply to utilities that failed to pay their bills on time.
Under Raj Kumar Singh’s watch, the ministry has invoked agreements with Jharkhand, Karnataka and Tamil Nadu to recover combined overdues of Rs 30,087 crore, taking a politically non-partisan approach to tackle one of the banes of the power sector.
As of August 31, Jharkhand had an outstanding of Rs 3,292 crore. The ministry recovered Rs 714 crore and has served notice for recovery of Rs 1,126 crore. Karnataka discoms had an outstanding of Rs 5,240 crore. Recovery notices have been issued for Rs 1,540 crore. Tamil Nadu had an outstanding of Rs 21,555 crore.
Tripartite agreements are a payment security mechanism for power supplied from central gencos to states. It is signed by a state, the ministry and the RBI. In case a discom fails to pay its bill, it becomes the state’s liability. The ministry can then debit the amount from the state’s account with the RBI.
Under the ministry’s direction, central power stations also issued in recent months disconnection notices to J&K, Madhya Pradesh and poll-bound UP, where BJP has high stakes.
Discoms get 45 days to pay their bill for power bought from gencos. After this period, the outstanding bill is designated as ‘overdue’ amount and gencos charge interest.Internet Explorer Channel Network