The Association of Power Producers has written to Tamil Nadu Generation and Distribution Corporation’s (Tangedco) Chairman and Managing Director Vikram Kapur over the spiralling dues from the State utility to its members.
In a letter dated June 11, Ashok Khurana, Director General, Association of Power Producers, pointed out that from February 2019 till June 2019, the pending payables towards five generating companies have increased to ₹4,441 crore from ₹3,090 crore.
In February the association wrote to Tangedco about the huge dues and pointed out that there is a normal delay of more than 90 days in case of regular receivables. In its latest letter, it pointed out that Tangedco owed ₹651 crore to DB Power, ₹1,463 crore to Jindal Steel and Power, ₹364 crore to GMR Warora, ₹1,124 crore (long- term power) and ₹308 crore (medium term) to IL&FS and ₹531 crore to Vedanta. In total, these firms have tied up for capacity of 1,498 MW.
“Payments against these overdue bills are being released only when a discount of 2-3% is being offered. Further, all change in orders passed by Central Electricity Regulatory Commission (CERC) are being challenged at Appellate Tribunal for Electricity and only partial payments are being released even after interim orders by APTEL for 80% payment,” the association claimed.
It also pointed out that the said power plants were deeply stressed and were operating by taking additional corporate loans to service their debt and making coal payments in advance. “Working capital limits of these plants are completely exhausted and some of them have already defaulted on their debt servicing obligations in view of the negligent cash flows,” the association said. The association requested Tangedco to reduce the payment cycle of regular monthly bills from more than 90 days to 30 days and not to ask for discount.
It also sought a meeting with Mr. Kapur to discuss the measures to avoid a situation where the affected power projects landed in insolvency proceedings and also adversely impacted the power supply to Tangedco and its consumers.
When contacted, Mr. Kapur said he has not seen the letter.
“We keep releasing funds from time to time. However there is usually some delay due to our tight financial position,” he added.
