Officials consider reserve against no specific liability, revaluation of Board lands
The Tamil Nadu Electricity Board (TNEB) has accumulated losses of about Rs.16,775 crore. But, according to officials who are working out ways to ensure a smooth beginning for the bodies created in the wake of restructuring of the Board, they have been able to arrive at positive net worth for the new entities.
The figure of cumulative losses has been arrived at after taking into account the audited accounts of the Board for the financial year ending on March 31, 2009. It pertains to the losses suffered by the Board between 2000-2001 and 2008-2009.
It is since 2006 that there had been a steep rise in the losses as the quantum of power purchased by the Board has gone up substantially.
While the holding company TNEB Limited is a shell company, the Tamil Nadu Transmission Corporation (TANTRANSCO)'s source of revenue will be through another subsidiary firm, the Tamil Nadu Generation and Distribution Corporation (TANGEDCO) Limited, which alone will have cash flow.
Explaining how they have been able to arrive at positive net worth, the officials say they have taken into account reserve against no specific liability and revaluation of the Board's lands in prime locations of the State. Under the head ‘Reserve against no specific liability,' which essentially means consumers' remittances of security deposits and infrastructure development charges, the amount comes to around Rs.6,600 crore.
Through the revaluation of the Board's lands, the losses have come down further by Rs.6,800 crore. The government's equity of about Rs.3,405 crore has also been adjusted.
This leaves a surplus of about Rs.30 crore, which will be distributed proportionately between the TANTRANSCO and TANGEDCO.
The government has agreed to be a signatory to the proposed tripartite agreement on the protection of service conditions of Tamil Nadu Electricity Board (TNEB) employees and pension and terminal benefits of pensioners and the workers.
There are about 83,000 pensioners of the Board and the annual liability towards pension is of the order of Rs.1,200 crore.
Referring to the demand being made by certain sections of employees for attaching the pension liability to the holding company, the officials say that the holding company is only a shell firm with no revenue.
If the pension liability were to be attached to the TNEB Limited, the subsidiaries have to contribute the amount to the holding company and this will be disallowed for any exemption or concession under the Income Tax Act.