The Calcutta Electric Supply Company (CESC), part of the RPG group, has arrived at an amicable arrangement for settling dues amounting to Rs 15 crore with the Unit Trust of India (UTI).
Earlier, CESC had defaulted on its dues to UTI, sources in the financial institution told Business Standard. The company had to pay about Rs 15 crore on June 6, 2001. This include both interest and principal repayments on term loans as well as debentures. CESC had borrowed about Rs 100 crore from UTI. Most of these loans are for its Budge-Budge project in West Bengal.
The RPG spokesman told Business Standard that the company had already repaid Rs 9 crore and the balance Rs 6 crore will be repaid by the end of this month or in August. "This agreement was reached at a meeting with UTI in Mumbai," the spokesman said.
CESC is one of the leading power utilities in the country and holds exclusive rights for power distribution in Calcutta. The company's woes began when it was not allowed to hike tariffs. The last time it increased its tariffs was in December, 1998.
Its problems have further been compounded by high transmission and distribution losses which are the bane of the power sector. CESC also could not recover about Rs 200 crore from its consumers on account of the hike in fuel prices. All these caused cash flow problems for the company, leading to default. CESC plunged into the red and posted a loss of Rs 71.45 crore for 1999-2000.
CESC has now applied to the state power regulator, West Bengal Electricity Regulatory Commission for a tariff revision of 27 per cent in 2000-01. The company is also planning to reduce its transmission and distribution losses in an attempt to bounce back to the black.
