Central PSU to loan Rs 6,000 cr to UP Power Corp

The Rural Electrification Corporation (REC) has approved a loan of Rs 6,000 crore to the UP Power Corporation. The proceeds will be utilised by the UPPCL for the rural electrification, strengthening the power distribution network and constructing power transmission lines.

The agreement on the loan was reached during the recent visit of the chairman of the REC, AK Lakhina, to Lucknow recently. The contract is likely to be signed in the first week of June.

Ashok Kumar Khurana, chairman of the UPPCL, said Lakhina appreciated the fast pace of rural electrification in the state. So far 7,500 villages have been electrified in the state and the work in remaining 23,000 villages shall be completed by January 2007, he added.

The REC chairman also enquired about the progress of enlisting the services of the franchise for the recovery of the power dues in the rural areas. The UPPCL has hired the services of the Price water house coopers and Ernst and Young', for working out the mechanism for the selection of the franchise. The consultants also made a presentation before the REC chairman during his visit here.

Khurana said the funds from the REC would also be utilised for the construction of the power evacuation lines. He said with the addition, the power transmission network would be further strengthened in the state. "The focus of new transmission lines would be for supplying power to the rural areas as the rural electrification programme has been taken up in the state in a big way'', he added.

It may be recalled that the on May 10, last the cabinet had approved the proposal to give franchisee to NGOs, cooperative societies and panchayati raj institutions in the rural areas for the recovery of the power bills. These franchisees would distribute the power bills in rural areas and also recover the dues. The bill recovery scheme is being implemented in accordance with the conditions laid down by the Rural Electrification Corporation (REC) in this regard.

Meanwhile the agreement between the BHEL and the UPPCL for the refurbishment of five units with 200 Mw capacity each, of the Obra thermal power has been signed. The refurbishment work of all the five units will be completed in next 30 months.

With the completion of the refurbishment, the Plant load factor of the all five units of OBra is likely to improve to 80 per cent against the present ranging between 50-57 per cent. The coal consumption is also likely to be reduced by 30 per cent after the refurbishment.

The Cabinet had recently approved the proposal to rope in the services of the BHEL for the refurbishment of the old and worn out five thermal power units, of the Obra thermal power station. The cost of the refurbishment project is Rs 1,000 crore and Rs 117 crore for the Electrostatic Precipitator (ESP) to be installed in each unit for containing air pollution.

The PFC has extended loan for the project which would meet 70% cost while the rest would be contributed by the state government.