Power Minister R K Singh has called a high-level meeting of government top brass and industry tomorrow to sort out issues related to revised RBI norms for bad loan, coal shortage and stranded power projects.
Secretaries of Coal and Power, the Railways Board Chairman, the Central Electricity Authority Chairman and the Central Electricity Regulatory Commission Secretary are expected to attend the meeting, a source said.
The chiefs of state-run power giant NTPC, PFC and REC, and the representatives of big power sector firms including Adani, Tata, JSW, GMR, Reliance, Essar, Lanco, Jaypee and L&T would also participate in the meet, the source said.
Earlier this year, Reserve Bank had come out with 'Resolution of Stressed Assets-Revised Framework' on February 12, 2018.
Post this circular, all other RBI guidelines for handling short-term and long-term issues regarding loan management (Flexible structuring of loans-5/25 scheme, SDR, S-4A, CDR scheme etc.) have been withdrawn.
According to the Circular, even a one-day default in debt servicing would require reporting to RBI and implementation of Resolution Plan.
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All accounts with exposure of Rs 2,000 crore and above, on or after March 1, 2018 and in default have to formulate a Resolution plan within 180 days failing which, the case has to be mandatorily referred to NCLT for Insolvency and Bankruptcy Code (IBC) proceedings.
The Association of Power Producers had pleaded before the RBI and the Prime Minister in a letter that there are currently more than 75,000 MW assets either under operation or under construction severely stressed due to various reasons like lower availability of coal, lack of Long Term/Medium Term PPAs, divergence between policy & regulations on pass through of incontestable change in law factors, huge delays in regulatory orders, and pending receivables from discoms.
The association said that stress in the sector is due to various factors beyond their control including delay of 3-4 months in payment of regular bills for supply of power from discoms.
They said there are Rs 8,300 crore of receivables currently and more than two years of delay in receiving orders from Regulatory Commissions to pass on the increase in cost of coal due to various taxes and duties which are to be treated as 'Change in Law'.
They further said that around Rs 7,800 crore amount is stuck as regulatory receivables due to delay in Orders and dispute being raised by discoms at the higher court, and this amount is increasing progressively.
They also draw attention towards short supply of coal as Coal India supplies only 60 per cent of coal required.
The association demanded that RBI should relax "default" clause from one-day delay in debt servicing and classify the asset as NPA (bad loan) only after the completion of 180-day period.
The submission of Resolution Plan (RP) should be initiated only after the 180-day period, the association said and sought to extend the implementation period of Resolution Plan from 180 days to one year as the current timeline under the new RBI circular to complete the resolution plan is extremely difficult.