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Bailout bid of little help to state board

The financial status of Bihar State Electricity Board would be hardly affected by the Rs 1.9 lakh crore debt-restructuring plan announced by the Centre, power officials said on Wednesday.

The Centre had on Monday announced the bailout for debt-affected state power boards.

Bihar State Electricity Board (BSEB) officials said the Centre’s announcement would neither have any positive or negative effect because of the bailout. “We are yet to receive the detailed guidelines from the Government of India. But the quantum of loans that the BSEB owes to the state government is not very big,” said Vinayak Chandra Gupta, member (finance and revenue), BSEB.

He added: “The total amount of loan would be around Rs 2,000 crore. Our condition is not as bad as other states.” Rajasthan, Uttar Pradesh, Tamil Nadu and Punjab would be the biggest gainers of the central bailout. The power boards of these states owe around Rs 96,000 crore to the governments and other agencies.

BSEB sources said paying back its Rs 2,000 crore debt would not be a big challenge, as most of it is owed to the Bihar government and banks and not private agencies.

“We may not need to take advantage of the Centre’s restructuring package either if we can recover Rs 6,000 crore due to us from various consumers. Then, we can easily pay of the debt of Rs 2,000 crore,” a source said.

“Of the overdue Rs 6000 crore, government departments and agencies owe us around Rs 3,000 crore,” the source added.

Asked what the board was doing to recover the dues, the officials said steps were being taken. “A chunk of the amount due to us includes delayed payment surcharge,” a source said. “The state government has agreed to adjust the surcharge against the loan advanced by the state government to the power board and interest accrued on it.”

The Centre has linked the restructuring package with performance of the state electricity boards, which now have to impose power tariff hikes annually and other measures such as privatisation of distribution through franchisee arrangements and pre-paid metering for government consumers by March 31, 2013.

BSEB sources said the board is already taking steps to restructure itself. For example, it plans to appoint distribution franchisees in major cities. The board has also been regularly submitting its aggregate revenue requirement for tariff hike to the regulatory commission.

Asked about pre-paid metering for government consumers, a senior board official said: “The issue is not even in the reckoning. The board is sticking with the old system of post-paid meters.”


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