NTPC's dues collection since 2003-04 at 100 per cent

In an indicator of the financial health of state electricity boards, the country's top power generator, National Thermal Power Corporation (NTPC) Ltd, has collected 100 per cent dues since 2003-04.

The increase in collections has seen a spurt with 81.3 per cent collections in 2001-02 and 96.5 per cent in 2002-03 and 103.7 per cent in 2003-04. Collections have since stabilised at 100 per cent. NTPC generated 170.88 billion units of power in 2005-06.

"States have realised that they cannot get power without paying for it. There are regulatory mechanisms in place to enforce regular payments. We have become strict on the letter of credit parameter," NTPC Director (Commercial) Ram Sharan Sharma told Business Standard.

The new norms require the last 12 months billing to be updated every six months. States need to maintain 105 per cent of the average billing in the form of a letter of credit.

"As the incentives offered for not defaulting have been taken away, 2006-07 will be a test period. On an average, NTPC receives around 45 per cent of payments on the first of every month," Sharma added.

NTPC has also finalised a payment rebate scheme for various states to encourage timely payments during the current fiscal.

Sharma believed that with NTPC's power priced around Rs 1.5 to Rs 1.6 per unit, the company was competitive even by international energy market standards.