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Himachal Pradesh has become the 18th State to join UDAY, a central scheme for revival of debt stressed power distribution companies, availing a net benefit of about ₹823 crore.
“Government of India signed a Memorandum of Understanding with Himachal Pradesh and state Discom under the Ujwal Discom Assurance Yojana (UDAY) today, for operational and financial turnaround of the Discom. Himachal Pradesh is the 18th state to sign MoU under UDAY,” Power Ministry said in statement.
Benefits
An overall net benefit of about ₹823 crore would accrue to the state by opting to participate in UDAY, by way of savings in interest cost, reduction in Aggregate Technical and Commercial (AT&C) and transmission losses, interventions in energy efficiency during the period of turnaround.
The State would take over ₹2,891 crore of Discom debt, 75 per cent of the total Discom debt of ₹3,854 crore as on September 30, 2015, as envisaged in the scheme.
It also provides for the balance debt of ₹963 crore to be re-priced or issued as state guaranteed Discom bonds, at coupon rates of 3 per cent less than the average existing interest rate. The annual saving in the interest cost to the state would be around ₹140 crore on account of restructuring of the Discom debt.
Improvements
UDAY not only focusses on bringing about financial turnaround of the Discoms, but also lays stress on improving their operational efficiencies.
In order to bring about a sustainable turnaround of the Discom, the state and the Discom will improve operational efficiency. The reduction in AT&C and transmission losses to 12.75 per cent and 3.50 per cent respectively is likely to bring additional revenue of around ₹119 crore during the period of turnaround.
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