The stalemate over bifurcation of assets and liabilities between the two Telugu States -- Telangana and Andhra Pradesh -- is likely to continue as a consensus could not be reached in key aspects like division of institutions listed under the Schedule IX of the AP Reorganisation Act.
The division of assets and liabilities of the erstwhile AP Power Finance Corporation has been a major area of concern with Telangana government contesting the allocations made by the expert committee headed by Shila Bhide that submitted a series of recommendations for bifurcation of the institution. The committee has recommended allocation of the outstanding bonds of the power finance corporation in the ratio of 59.54 and 40.46 respectively between Telangana and Andhra Pradesh.
Interestingly, the allocation comes in the light of the provision made in the AP Reorganisation Act 2014 for dividing the assets and liabilities in the ratio of 58:42 on the basis of population of AP and Telangana respectively. The corporation had issued long term bonds worth ₹4,053.3 crore over a period of two years - November 2010 and 2012 - in the erstwhile united State. The bonds were raised in nine tranches with coupon rate ranging from 8.49% to 9.97%. The repayment of the principle amount of these bonds is set to start from November next year.
The erstwhile corporation had mobilised highest amount of ₹1,787.6 crore through bonds issued on November 9, 2012 with 10-year maturity preceded by another issue amounting to ₹1,011.3 crore on November 15, 2010 with 12-year maturity. The Andhra Pradesh government has accepted the recommendations made by the expert committee and issued orders announcing the demerger of the corporation in July this year, but Telangana officials contested the allocation claiming that it was made to pay significantly higher amounts.
There were initial delays in the payment of its full share of interest by the Telangana government owing to its opposition to the higher share of liabilities being apportioned to the State. “We have registered our protest and had been making the payments of around ₹300 crore as our full share of interest liability annually,” a senior official told The Hindu .
