The Government has begun talks with the representatives of various states to streamline and remove the hurdles in the power sector for higher generation.

Power Minister Jyotiraditya Scindia is holding a day-long meeting with the energy ministers and senior officials of various States to discuss the issues confronting the sector and measures to resolve them.

“We are here to deliberate upon the challenges in the power sector,” Scindia said while addressing a gathering of various stakeholders in the sector.

The Union Ministry along with the States will, among other things, discuss the issue of tariff revision, financial health of the electricity distribution companies and challenges in power transmission.

“Intra-state transmission, last year’s grid failure, financial restructuring package of discoms, among other issues, will be discussed today,” Power Secretary P. Uma Shankar said.

Other dignitaries attending the meeting include the heads of PSUs and State energy secretaries. The ailing health of the State Electricity Boards is a cause for concern for the sector and will be discussed at the meeting.

Debt revamp

In September last year, the Cabinet had approved Rs 1.9-lakh-crore debt restructuring package for the power discoms.

Under the scheme approved by the Cabinet Committee on Economic Affairs, 50 per cent of the short-term outstanding liabilities would be taken over by the state governments.

The balance 50 per cent loans would be restructured by providing a moratorium on principle and the best possible terms for repayments.

As part of mandatory conditions, 50 per cent of the outstanding liabilities up to March 31, 2012 is to be taken over by the state governments.

The liabilities shall be first converted into bonds to be issued by discoms to the participating lenders, duly backed by the state government’s guarantee.

The deadline for the scheme has now been extended to March 31, 2013, from the earlier date of December 31, 2012. It is effective from the date of notification.

Grid failure

Today’s meeting will also discuss last year’s grid failure which affected half of the country’s total population of 1.2 billion.

“The grid failure in July, last year, made headlines both in India and overseas. We will discuss how to avert these situations in the future,” Shankar said.

(This article was published on February 5, 2013)
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