CHENNAI : Mounting capital expenditure for new thermal projects, salary hike for employees, high cost of coal and rakes and non-revision of tariffs for the past 5 years have landed Tangedco in an unenviable situation of debts crossing ?1 lakh crore. This was Tamil Nadu government’s total debt in 2011-12.
Tangedco, meanwhile, is struggling to pay up dues worth Rs 30,000 crore to thermal and renewable power generators. For Tangedco, increasing the tariff is the only way to overcome the crisis, but it is unable to do so as the state government is refusing to give its green signal for a tariff revision.
“Slippages in regulatory timelines with regards to filing of tariff petitions, closure of annual accounts and continuing serious audit qualifications and default during financial year 2018 are some of the concerns. Dependence on tariff subsidy from Tamil Nadu government has increased substantially,” said Union power ministry in its 7th annual integrated ranking of discoms. The net worth of the discom remains at (-) Rs 44,357 crore and its debts has mounted to ?1,01,294 crore, the report said.
Tangedco has been seeking to present the annual revenue requirement (ARR) but the government is yet to give its nod. Only if Tangedco presents its ARR, will the process of increasing the tariff begin. “Debt is largely on account of expenditure for capacity expansion and system augmentation in order to meet the growing demand for electricity and providing uninterrupted power to consumers,” said a senior Tangedco official. “Debt has been raised also to cover operational expenses such as meeting exigencies like cyclone damage, which could not be fully reimbursed from the calamity relief fund,” the official said. In Gaja cyclone alone last year, the discom lost several lakh transformers, hundreds of sub-stations and power poles. The discom has not been reimbursed their cost fully. Such losses owing to natural calamity has become an annual feature since 2015. There is a gap between the average cost of supply and actual revenue requirement. Increase in cost of coal and freight charges add to the misery, said the official.
If tariff is not increased, there should be immediate infusion of liquidity into the discom. “We will be able to get loans at lower interest rates if the discom’s rating improves from B grade. This can happen only if we have a healthy balance sheet,” said the official.
“TNERC must flag the discom for not presenting the ARR. Only if Tangedco’s financial health is good, will more industries be able to set up base in Tamil Nadu as they all expect power supply round the clock,” former Union power secretary Anil Razdan told TOI.