The Telegraph
Saturday , April 26 , 2014
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DVC taps stakeholders to chart revival route

New Delhi, April 25: The board of Damodar Valley Corporation (DVC), is in talks with its stakeholders — the Bengal and Jharkhand governments and the Union power ministry — to work out a turnaround plan for the power utility, saddled with a huge debt of Rs 29,000 crore.

The board also wants private entities, which owe nearly Rs 2,000 crore to the company, to cough up the money soon.

“There is no question of selling or hiving off the company or parts of it. The DVC board is, however, exploring various possibilities to restore the firm’s financial health and performance at its peak level in consultation with its principal stakeholders,” Arup Roy Choudhury, chairman of NTPC and acting chairman of DVC, told The Telegraph.

Among the alternatives being considered by a committee set up by the board is to transfer some of DVC’s functions to the state governments that own stakes in the company.

“The aim of the DVC board is to find a way of turning around this company without any job loss at all,” Roy Choudhury said.

DVC has run up a huge debt of Rs 29,000 crore, including a short-term debt of about Rs 3,000 crore and an overdraft of Rs 3,000 crore, at the end of the last fiscal. The rest are project loans. The company has a cash loss of over Rs 2,700 crore in the last financial year.

Power ministry officials said the situation was so grim that DVC had to borrow to pay its employees.

Further, DVC has an outstanding of Rs 8,000 crore, including the Rs 2,000 crore from private parties.

Sources said the DVC board had ordered probes into why the company’s officials had failed to recover the dues even as power was continued to be sold to the defaulters.

Among states, Jharkhand owes Rs 5,933 crore to DVC, Delhi has an outstanding of Rs 912 crore, while Madhya Pradesh is yet to pay Rs 650 crore.

Union power ministry officials said neither the Centre nor the state governments of Bengal and Jharkhand were happy about the way the company had run aground.

Bengal also wants DVC to invest in de-silting the barrage reservoir and its irrigation canals.

Panel pill

The DVC board has appointed a committee, comprising directors in its commercial, system and finance departments, to hold discussions with Bengal and Jharkhand for a revival plan. This will then be discussed with the power ministry

“The committee has also been mandated to find a solution which will be revenue neutral for DVC and does not lead to loss of employment for its employees. The committee is yet to come to the board with its findings... we hope they will after having extensive discussions with both the beneficiary states,” Roy Choudhury said.

He denied reports about DVC transferring its industrial transmission system to Bengal.

“Any restructuring of the company will require the approval of the stakeholders and the Government of India. No DVC chairman, permanent or temporary, can take any unilateral decision on this,” he said.

Earlier this week, Jharkhand chief minister Arjun Munda had urged the Election Commission to intervene and stop DVC from handing over the assets to the Bengal government.

“The transfer of HT Transmission and Distribution system to Bengal will allow the transfer of ownership of Durgapur barrage and the entire irrigation system to the government of Bengal,” Munda had said in his letter to the poll panel.

Munda argued that DVC could not go ahead with such a move at a time the elections were on and model code of conduct was in force.