Securitisation of Rs 31,000 crore of dues begins soon
Securitisation of dues amounting to Rs 31,000 crore of state electricity boards (SEBs) to power generating units will begin this month with the West Bengal government taking the lead.
Reserve Bank of India has given the green signal to the process. The process of issuing bonds by all state government is expected to be completed in a few months.
The West Bengal government on behalf of West Bengal State Electricity Board (WBSEB) will issue bonds worth Rs 2,100 crore to debtors like Damodar Valley Corporation (DVC) and National Thermal Power Corporation (NTPC) this month.
Talking to reporters at the sidelines of an interactive session on The Electricity Act 2003, chairman Central Electricity Regulatory Commission (CERC) Ashok Basu said the process of issuing bonds will start with Bengal issuing bonds with coupon rates of 8.5 per cent tax free bonds interest being payable half yearly. The tenure of the bonds would be 15 years with a moratorium of 5 years of repayment.
Basu said total outstandaings owed to power generating units was Rs 41,473 crore of which the principal amount was Rs 25,000 crore, the rest being interest and surcharge.
SEBs had asked for 50 per cent waiver of surcharge and interest and total dues were settled at Rs 31,000 crore, with around Rs 10,000 crore being written off.
Bonds will be issued in lieu of cash payment to the power generating companies from whom SEBs had purchased power without paying.
Modalities of the issue of bonds was recommended by a expert committee which submitted its report in 2001. States governments had signed agreements with the Centre on steps to restore viability of SEBs.
