NTPC ultimatum to govt as discoms trip on dues
Navneet Sharma
CHANDIGARH

MOUNTING ARREARS Cites provisions of bulk sale purchase and tripartite agreements, which provide for discontinuation of supply in case of default ( )

If bills remain unpaid for over two months, the NTPC can discontinue or reduce supply of power to bulk power consumers MKV RAMA RAO NTPC executive director

: Upset over non-payment of dues, the National Thermal Power Corporation (NTPC), the largest power generation company in the country, has served an ultimatum to the Haryana government on power supply to the two state-owned power distribution companies.
The NTPC gave the warning after distribution companies Uttar Haryana Bijli Vitran Nigam (UHBVN) and Dakshin Haryana Bijli Vitran Nigam (DHBVN), which are in dire straits, tripped on their bills for the power purchased from it. It has cited provisions of bulk power sale agreement and tripartite agreement signed between the Centre, government of Haryana and the RBI, which provide for discontinuation or reduction in supply in case of default.

The Haryana Power Purchase Centre (HPPC) headed by managing director of the UHBVN, which makes purchases for the two power utilities, owes Rs 480 crore to the power sector giant. The NTPC raised a bill of Rs 334 crore in August 2011, but got a payment of only Rs 75 crore. Another bill of Rs 221 crore sent in September remains unpaid, according to sources. A team of the NTPC also met the power company officials, but no assurance was given on payment.

“If any bills remain unpaid for a period exceeding two months from the date of issue of bill, the NTPC shall have the option to discontinue or reduce supply of power to such bulk power consumers,“ NTPC executive director (commercial) MKV Rama Rao wrote to the chief secretary on Tuesday, citing clauses of the bulk power supply agreement.
The discoms have been asked to clear the dues before October 4.
In its letter, the power generation corporation has cited clause 15 of the tripartite agreement, as per which in the event of payments not being made within 60 days, the supply of electricity would be reduced by 5%, as compared to average daily supply for the preceding 60 days.
Similarly, the reduction in supply of electricity will be increased to 10% and 15% after 75 and 90 days of delay, respectively.

“Our 70% of energy billing is towards the payment of fuel bills such as coal and gas. To operate our plant optimally, we need to pay our bills,“ NTPC officials told the power utilities. The two lossmaking companies, which accumulated losses and loans of around Rs 16,000 crore and have been taking loans for day-to-day operations, have also run up dues worth about Rs 3,500 crore payable to the Haryana Power Generation Corporation Limited (HPGCL) on power purchased from it. Being a state governmentowned company, HPGCL is in no position to reduce or suspend power supply to these two companies though. UHBVN and DHBVN are in the red due to huge commercial losses and inefficiencies and have been facing a severe liquidity crunch. As the banks are reluctant to provide further loans in view of their limited debt servicing capability, the two utilities have requested the government to bail them out through long-term bonds and early release of rural electrification (RE) subsidy. They are also pushing for hike in power tariffs.

Efforts were made to contact financial commissioner and principal secretary, power, Madhusudan Prasad, and UHBVN MD AK Singh, but they were not available.