The Telegraph
Thursday , August 21 , 2014
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Agreement on DVC’s dues

Ranchi/Calcutta, Aug. 20: Power utility Damodar Valley Corporation is hoping for an early clearance of dues accumulated by Jharkhand’s state electricity board in a bid to tide over an impending generation hurdle that has emerged on account of its inability to pay for coal.

At a review meeting in Ranchi between DVC officials and state power department officials in the presence of Union minister of state for coal and energy (independent charge) Piyush Goyal, Jharkhand Urja Vikas Nigam’s (JUVNL) dues were scaled down from Rs 8,000 crore to Rs 4,370 crore.

JUVNL’s outstandings on account of power purchases were reevaluated after reconciliation of arrear outstanding bills undertaken by both parties.

Additional power secretary R.N. Choubey, who is also chairman of DVC, was present at today’s meeting where officials elaborated how DVC had been forced to scale down generation by around 1,000MW because of acute shortage of funds to buy coal.

Officials of DVC, which supplies power to industrial consumers in Bengal and Jharkhand, besides Coal India subsidiaries, said JUVNL was not paying its monthly power purchase bills, averaging Rs 150 crore to Rs 160 crore, regularly, further adding to the DVC’s funds crunch.

Following the submissions, the Union minister assured DVC that the Rs 3,000 crore package, allocated to then Jharkhand State Electricity Board (JSEB) under a financial restructuring plan to help clear outstanding dues to DVC, would be released at the earliest.

Sources said the minister also assured DVC that the power board’s restructuring package would be put up before the Union cabinet at its meeting scheduled later this week after which necessary steps would be taken to release the funds to Jharkhand.

Regarding release of monthly power purchase bills from DVC, sources revealed that the state government had agreed that Rs 500 crore would be released to DVC at the earliest.

Energy secretary J.B. Tubid, who took charge of the department late yesterday evening, said all out efforts would be made to clear outstanding bills for power purchased by JUVNL at the earliest.

DVC procures most of its coal for its 6357.2MW generation capacity from Coal India. It has accumulated dues of Rs 1,403 crore against supply of coal. Further, Coal India has put in place a cash-and-carry policy which does not allow coal supply on credit.

The power utility has said that with generation becoming uncertain, it would have to resort to loadshedding and load restrictions for consumers in its supply areas.

But the scenario does not look that grim after today’s meeting. “We are hopeful of recovering dues. The proceeds could be utilised to make payments to coal companies and service immediate debt obligations,” said T. Bandyopadhyay, executive director (system) of DVC.

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