The public sector undertakings (PSUs) of Telangana executing irrigation and power projects have heaved a sigh of relief with the suggestion prevailing over the Rural Electrification Corporation (REC) and Power Finance Corporation (PFC) to resume disbursement of loans after a gap of nearly six months.
Ongoing works pertaining to 5×800 megawatt Yadadri Thermal Power Station (YTPS) and Kaleshwaram project were impacted since the disbursement of loans from the two corporations were stopped earlier this year following directions from the Ministry of Power (MoP) to borrowers, Telangana State Power Generation Corporation (TS-Genco) and Kaleshwaram Irrigation Project Corporation (KIPC) to enter into fresh tripartite agreement with the lenders and MoP for resumption of loan disbursement.
The two corporations had agreements already entered into with the Central financing PSUs and the projects are under execution. “As it is works on the ongoing projects have been impacted for over 18 months due to the COVID-19 pandemic-induced problems such as delay in the movement of material and machinery and shortage of labour due to return of workers to their native places”, a senior official said.
The Centre had stopped disbursement of the loans stating that the State’s borrowings had crossed the limit prescribed under the Fiscal Responsibility and Budget Management (FRBM) Act provisions including the direct borrowings by it and the borrowings of State PSUs with its guarantee. The State, however, has been contesting that as has been the practice for long as the borrowings of State PSUs with State Government guarantee should not be treated for the FRBM limit.
The corporations on their own and the State Government wrote separately requesting the Central PSUs not to stop disbursement of loans committed. Even Chief Minister K. Chandrasekhar Rao informed the Assembly recently that the Ministry of Heavy Industries had written to MoP asking not to stop the loans for ongoing projects stating that the delay would adversely impact their progress.
It is understood that REC had released ₹992 crore loan instalment to TS-Genco last week and the REC and RFC had also expressed their willingness to resume disbursement to KIPC awaiting receipt of utilisation certificates. Instalment of ₹1,200 crore is due from REC and ₹2,000 from PFC to KIPC executing both the Kaleshwaram and Palamuru-Rangareddy lift irrigation proejcts.
When contacted, Chairman and Managing Director of TS-Genco D. Prabhakar Rao said they had received the loans instalment and in turn the Genco had paid it to the executing agencies. The utilisation certificates (UCs) were sent long back to REC. They were preparing to send the UCs to PFC so that another ₹800 crore instalment is released.
Meanwhile, the irrigation department authorities stated that the release of loan by the REC and PFC would help them speed up ongoing works.