Cabinet okays proposals to raise bonds, avail loans

Ailing Discoms and RTC stuck with ageing fleet stand to gain most

Chief Minister Y S Jagan Mohan Reddy chairing a Cabinet meeting at Secretariat at Velagapudi near Vijayawada on Wednesday.

The State Cabinet, which met here on Wednesday, approved proposals to raise bonds to bail out ailing Discoms, avail loans to purchase new buses for the Andhra Pradesh State Transportation Corporation (APSRTC) and raise the borrowing limit of the AP Civil Supplies Corporation. With this, the government, which is facing a financial crunch, will have a breather for more than ₹ 7,700 crore.

The meeting, chaired by Chief Minister Y. S. Jagan Mohan Reddy, discussed the proposals on bonds and loans threadbare. The Cabinet decided to issue bonds worth ₹ 4,741 crore to pull the Discoms out of “financial crisis.”

The bonds would be raised by the Andhra Pradesh Power Finance Corporation, for which government guarantee had been given on September 23. The government will appoint a Chief Financial Officer (CFO) and a company secretary to the corporation.

The pending subsidies to be given to power utilities stand at ₹5,601 crore. The YSRCP government has been maintaining that the previous one left the Discoms with a debt burden of ₹14,857 crore, and signed Power Purchase Agreements (PPAs) with terms favouring the companies.

The Cabinet decided to avail a term loan of ₹1,000 crore to purchase new buses for RTC. The government has plans to replace about 3,500 old buses. The present fleet strength of the RTC stands at 11,920. Of this, 3,677 buses have already covered a distance of more than 10 lakh km. The corporation has plans to roll out electric buses to bring down operating costs and also reduce pollution.

Borrowing limit up

The government plans to purchase about 1,000 electric buses in a phased manner apart from 300 buses under the Central government’s (Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles (FAME)-2 scheme.

The Cabinet cleared another proposal to raise the borrowing limit of the civil supplies corporation by ₹ 2,000 crore. The previous government had borrowed ₹4,800 crore between January and April through the corporation.

The State government has been pointing out that off-budget borrowings were diverted to other purposes by the previous one.