Union
Minister of State ( IC) for Power, Coal and Renewable Energy,Shri
Piyush Goyal has asserted
that the newly unveiled debt restructuring plan for DISCOMs, will eventually
lead to a saving of Rs 1,80,000 crore annually. Named
as UDAY (Ujjwal Discom Assurance
Yojana), which also means dawn in English, the
package involves a massive bailout plan for debt ridden Discoms,
besides measures to reduce power thefts, align consumer tariff with generation
cost and promote energy efficiency.
Shri Piyush Goyal held
an extensive investors interaction meeting in Mumbai on
Monday evening to explain the new power sector reform initiative of the
government. In a packed house attended by FIIs, Private Equity Funds, Sovereign
Wealth funds, Insurance companies, rating agencies, analysts and Mutual funds
among others, the Power Minister expressed confidence that UDAY will find
pan-India acceptance. “Almost all the state power ministers heartily welcomed
the new initiative during the Conference held in Kochi last week” he said.
Shri Piyush Goyal
further said “it is a bottom up approach, not a top down approach. The states
will be assisted and hand held to bring down the cost of power by improving
their distribution, transmission and sub transmission network, reducing the cost
of power through coal rationalization and also bringing down the interest cost
substantially.
Shri Goyal said the weakest aspect in the
power sector was related to distribution, wherein Discoms
have accumulated losses of approximately 3.8 lakh crores and outstanding debt of Rs 4.30 lakh
crores. The Minister said, UDAY is also a good news for the banking sector, which has a huge
exposure to the near bankrupt state Discoms.
Under
UDAY, states can take over 75 per cent of their debt as on September 30,
and payback lenders by issuing bonds. This takeover of debt will not be added
to the fiscal deficit of the states. For the remaining 25 per cent, the State
Electricity Boards shall issue bonds. The Minister assured the assembled
investors that the sovereign, state and PSU bonds of India have never failed on
payments.
Shri Goyal asserted that tariff increase was
no substitute for efficiency improvement and added “regulators cannot pass on
inefficiency of Discoms to consumers”.
The
Minister said the energy efficiency under UDAY would be achieved by reduction
in interest rate, reduction in aggregate technical and commercial losses, increase in coal availability, improving billing and
collection efficiency, and better demand side management. He said the National
Domestic LED Programme alone, when fully implemented
will lead to reduction of consumer bills to the tune of Rs 40,000 crore, besides reducing peak load by 20,000 Mega Watts.
Terming
UDAY as a new milestone in the power sector, even though it is optional, Shri Piyush Goyal
urged all states to look at it in the holistic fashion and see the benefits it
offers. He further said states accepting the scheme and performing as per
operational milestones will be given additional or priority funding under Deen Dayal Upadhyay
Gram Jyoti Yojana and
Integrated Power Development Scheme and other schemes of the power and
renewable energy ministries.
The
Minister said that if implemented in right spirit UDAY can help almost all the
loss making Discoms in the country to post profits
within next 2-3 years.
You can watch complete proceedings by clicking the web link
of Video recordings of
Minister's Investors Meet .
Click here for the Power Ministry’s detailed presentation on
UDAY
RM/RS