Ispat Industries and Ispat Metallics have committed to an institutionalised debt recovery mechanism to clear off Rs 270 crore plus owed in arrears to the Maharashtra State Electricity Board (MSEB).
The last two months have witnessed the arrears being reduced by over Rs 10 crore. Upto September 11, Ispat Industries owed Rs 268.34 crore while Ispat Metallics owed Rs 7.56 crore to MSEB.
Vinay Bansal, chairman of MSEB, confirming this said, "As per the arrangement worked out two months back, Ispat has given us a written undertaking and drawn a letter of credit (LoC) so that Rs 1.25 crore from their daily revenue collections is credited to the MSEB in no lien account. At the end of the month the current bill payment is first made to MSEB and the balance is used to set off the arrears payments. In the last two months, over Rs 10 crore has been paid in this manner bringing down Ispat's arrears to Rs 260 crore now."
A senior Ispat official when contacted said, "Our monthly bills average around Rs 16-17 crore. Around Rs 25 crore would be available to MSEB, of which the current monthly bill is paid first and the balance is used to set off the arrears."
Bansal noted that a similarly other corporates were also being allowed an installment method to clear up their dues to the MSEB at 12 per cent interest that was fixed by the Maharashtra Electricity Regulatory Commission (MERC)," Bansal said.
He added that the fiscal discipline being enforced in the last one year has been able to put the brakes on the growth in arrears.
The outstandings in March 1999 was at Rs 3,000 crore (up 44 per cent from the previous year). In March 2000 the arrears stood at Rs 4,500 crore exhibiting a 50 per cent growth. However, in March 2001 the arrears are still pegged at Rs 4,500 crore which shows a zero per cent growth, he noted.
