Execution of many power generation projects in the State, estimated to cost around ₹49,000 crore, may suffer a setback if the Central government sticks to its stand of making conditional the provision of financial support by its entities for the projects.
At present, six projects, having a total installed capacity of 6,200 megawatt (MW), are being funded by the Power Finance Corporation (PFC) and Rural Electrification Corporation (REC). All the projects, which are in different stages of execution, are expected to be commissioned in the next three years.
Broadly in three areas, the Centre has asked the State government to show progress in ensuring that the Tamil Nadu Generation and Distribution Corporation (Tangedco) quickly settles outstanding dues to its suppliers; collect dues from government departments and local bodies and energy accounting.
Till the end of December, Tangedco owed around ₹14,000 crore. At the same time, it is yet to realise ₹1,500 crore from local bodies and the State government’s departments for energy consumption. A foolproof energy accounting may not be possible in the State, given lakhs of agricultural connections get unmetered free supply.
Considering the seriousness of the Centre’s directive, State Electricity Minister P. Thangamani and Tangedco’s chairman, Vikram Kapur, met Union Minister of State (independent charge) for Power R.K. Singh a few weeks ago and briefed him on the State’s position. “We are still pursuing the matter with the Centre,” a senior official points out.
Special package
The State government has been seeking a special package of assistance from the Centre to clear dues to generators. It made this demand at a meeting of State Power Ministers’ conference in October.
When Mr. Thangamani met Mr. Singh, he also requested the latter to provide around ₹1,200 crore for purchasing and installing four lakh transformer digital meters, which would help the State bring down transmission losses.
Another official explains that these meters are expected to address the problem of unmetered power supply to agriculturists.
Regardless of the outcome of the State government’s requests for assistance, senior policymakers are of the view that the government may not be able to postpone the issue of tariff revision, in view of the “precarious” financial health of the Corporation.
As per an agreement signed at the time of joining the UDAY scheme three years ago, the government committed itself to a hike of 6% in power tariff to be effected in 2019.
So far, it has not yet been implemented due to obvious political reasons.
Since April-May 2019, the State is continuously on “election mode.” The revenue projections worked out then have also gone awry with the power utility’s loss crossing ₹9,200-crore mark during 2018-19, the policymakers said.
