Jharkhand today signed an agreement with the Power Ministry to join UDAY, a central scheme for the revival of debt-stressed power distribution companies, which will offer the state a net benefit of approximately Rs 5,300 crore.
The central and state governments and JBVNL (Jharkhand Bijli Vitran Nigam Ltd) signed a memorandum of understanding under the scheme -- Ujjwal Discom Assurance Yojna -- here today for operation and financial turnaround of JBVNL.
The signing ceremony was held in the presence of the Chief Minister of Jharkhand, Raghubar Das.
Speaking on the occasion, the chief minister said that "in coming years, we want to make Jharkhand a power and IT hub and our government is working in this direction".
Terming UDAY to be "a win-win scheme for all", Power Secretary Pradeep Kumar Pujari said most of the MoUs will be signed in the next few weeks.
The signing of today's MoU will lead to significant benefits for JBVNL, with Jharkhand taking over 100 per cent liabilities of outstanding dues with central public sector undertakings (CPSUs) and 75 per cent of the outstanding debt of JBVNL as on September 30, 2015.
JBVNL will have annual savings of almost Rs 115 crore in annual interest cost through reduction of debt to Rs 291 crore, from Rs 1,165 crore.
The balance debt will be repaid with fresh state-guaranteed discom bonds to be issued at coupon rates of around 3 per cent less than the average existing rate.
As a special dispensation, JBVNL will also be able to wipe out its outstanding dues amounting to Rs 6,000 crore.
"This would help the discom save more than Rs 1,000 crore annually by way of surcharge on outstanding dues to power generators," the ministry said.
Sustainability of operational and financial performance forms the core of UDAY.
The reduction in AT&C losses itself is likely to result in additional revenues of around Rs 2,000 crore for JBVNL till 2018-19.
