The Hindu Business Line : Writing off NTPC dues — Home, Power Ministries at loggerheads

THE Union Home Ministry has proposed to write off Rs 2,023 crore of its dues to the National Thermal Power Corporation (NTPC), besides another Rs 9,426 crore owed to the Railways and public sector coal companies. Opposing this move, the Power Ministry is moving a Cabinet note seeking a discussion on the subject.

The issue assumes currency in the context of NTPC, a company under the administrative control of the Power Ministry, floating an initial public offer to raise around $1 billion.

The dues relate to the period when the Government of India (i.e. the Home Ministry) controlled electricity supply, transmission and distribution in the erstwhile Union Territory of Delhi through the Delhi Electricity Supply Undertaking (DESU).

DESU was reborn as Delhi Vidyut Board (DVB) under the control of the Union Territory of Delhi. It was entrusted with the task of generation, transmission and distribution of electric power supply in the National Capital Territory (NCT) of Delhi, covering about 1,483 sq. km. The Home Ministry recently argued that at the time of Cabinet approval for the formation of DVB, it had suggested that the new entity be allowed to begin operations on a clean slate. Hence, the logic for the write-off of past dues.

Interestingly, there is no formal record to show transfer of DESU's assets and liabilities at the time of DVB's creation.

According to the Power Ministry, the write-off could have serious implications since states will be up in arms, protesting the "adoption of double standards." This, since the dues owed by ailing state electricity boards have been securitised and power bonds worth around Rs 32,900 crore issued to the Central Power Sector Undertakings (CPSU). In this securitisation exercise, there has been only a partial write-off of the dues.

The Home Ministry's total outstanding due as on September 30, 2004, is Rs 11,902 crore. Beside the NTPC dues of Rs 2,023 crore, it owes Rs 9,426 crore to the Badarpur Thermal Power Station (BTPS). BTPC is owned by the Central government and operated by the NTPC. BTPS owes this money to public sector coal companies and the Railways towards purchase of coal to fuel the plant.

The Ministry owes another Rs 61 crore to Power Grid Corporation of India Ltd; Rs 288 crore to National Hydroelectric Power Corporation; and Rs 104 crore to Nuclear Power Corporation of India Ltd.

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