 "Piyush Goyal")
Union Power & Coal Minister Piyush Goyal on Tuesday said states have floated bonds worth Rs 1 lakh crore under a debt restructuring scheme for the power distribution sector in just two-and-a-half months.
Goyal said Ujwal Discom Assurance Yojana (UDAY) was the most comprehensive assessment for the power sector since it followed a bottoms-up approach, which was why states are accepting it.
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“It will result in Rs 1.80 lakh crore in saving every year and you will be delighted to know that we have been able to place Rs 1 lakh crore of UDAY bonds by March 31 within a short span of two-and-a-half months,” the minister said, at the annual summit of the Confederation of Indian Industry (CII).
This will bring down the interest costs of the discoms by a significant level and therefore keep power tariffs at least at the level they are now rather than going up, he said. Under UDAY, 10 states — including Congress-ruled Uttarakhand — have signed memoranda of understanding till date.
The UDAY scheme restructures the debt but also brings upon the distribution companies to cut their losses and follow a road map for tariff hike. Goyal said industrial tariff rates for power might be high but it was crucial for subsidising electricity provided to rural populations and farmers.
Goyal said the rich could not complain over a system which helps reach electricity to lower income groups. He was replying to concerns laid out by members of industry who complained that high industrial tariff for power was holding back economic growth. “Our first priority is taking power to the poorest,” he said. On lowering industrial tariffs, Goyal said the effort was to address inefficiencies.
"We are not oblivious to the problem and are fighting it by increasing efficiency and reducing costs for businesses," Goyal said. He added this efficiency would be best achieved through the reforms announced for government distribution companies through UDAY.
The scheme, announced in November 2015, has been touted as a bailout of India's almost-bankrupt state-owned discoms that are weighed down by Rs 4.3 lakh crore of collective debt and Rs 3.8 lakh crore of losses and can't even afford to buy electricity from power generators.
The scheme envisages the states to take over 75 per cent of the debt held by their discoms as of September 30, 2015 in two years and pay back lenders by selling bonds. Discoms will sell bonds guaranteed by state governments to cover the remaining 25 per cent of the debt.
The minister also said PowerGrid Corporation has accomplished the highest ever yearly commissioning of projects worth Rs 30,300 crore. He said the establishment of two new international interconnections with Nepal and with Bangladesh would go a long way towards cementing India's working relationship with its immediate neighbours.
Goyal also noted the government's target for rural electrification was on track. "During 2015-16, 7,012 villages were electrified and the remaining 11,000 would be electrified within a year," he said, adding: that electricity would reach every home in all these villages by 2018 and every home in the entire country by next year.
On solar projects, he said tenders for 21 Gw were out and by April or May this year, they would be awarded with a power purchase agreement (PPA).
PowerGrid commissioned transmission projects worth Rs 30,300 crore (unaudited) during 2015-16, which is the highest-ever commissioning achieved by it in its history. The company also achieved the planned capex of Rs 22,500 crore (provisional). During FY16, tenders for transmission projects worth Rs 50,000 crore were released, setting a new benchmark for the highest ever tenders in a single year by the company. Overall, about Rs 1 lakh crore worth of power transmission projects came out into the market in the last financial year, Goyal said. Power Grid commissioned projects with 39 per cent growth last year, so Rs 30,000 crore worth of projects got commissioned over 24,000 circuit km, an official press release said.
On Coal India, Goyal said India made an addition of 42 million tonnes (mt) in a year, the highest ever addition to coal production. "From 494 mt production, we moved up to 536 mt by Coal India alone. In the two years since the present government came in, we added 74 mt."
"States have started a transparent e-bidding system to check such things. This will enhance quality and bring down prices of power equipment," Goyal added.
The government is focusing on a multi-pronged strategy to ensure increased electricity access and demand, he said. The overall strategy includes focus on enhancing energy efficiency, thrust on renewable energy and ensuring sustainable growth.
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