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NDPL to get Rs 245 cr bailout from Govt
After providing Rs500 crore equity to the BSES power distribution companies, the Delhi Government has no option but to infuse Rs245 crore in the form of equity in Tata Power Delhi Distribution Limited (NDPL). According to a top power official, another cabinet discussion is likely to happen on Monday and like BRPL and BYPL, CAG will audit the accounts of NDPL as well. The move comes after the Tata-backed discom approached the Government with a proposal on Tuesday to infuse funds in form of equity to improve its financial position.
A top notch power official said, “We cannot overlook the Tata-backed discom as it is also in a bad shape. They have performed better as the parent company could muster resources to handle the internal cash flow. According to the shareholders agreement, the Government will infuse 49 percent of Rs500 crore and the rest 51 per cent, i.e Rs255 crore will have to be provided by Tata. However, we will not let this burden the consumers of Delhi and a 35 per cent tariff hike next year is atrocious. The Government’s efforts will be to save the consumers from bearing the brunt of the financial position of the power discoms.”
However, not all power officials agree on the fact that the move to infuse funds as equity share would not hurt the power consumers of Delhi. A source in power department said, “The equity assistance will definitely percolate to the power consumers of the Capital in the form of tariff hike. Though 35 per cent tariff hike is speculated, it could be more if the discoms are able to manipulate the Government. Even the Electricity Regulator (DERC) has not been prudent enough and therefore still hasn’t received any plan from the BSES as to how they plan to liquidate their assets. Only the CAG audit of the accounts of BRPL and BYPL will reveal as to how these companies have incurred exorbitant debts of over Rs3,000 crore with various power generating and transmission companies.”
Chief Executive Officer, Sunil Wadhwa, NDPL, while admitting that there was no urgent need for an equity infusion, added that through the infusion they are looking at long-term recovery. He said, “We do not want to wait for a crisis to arise and become defaulters. The banks have been generous enough to provide us loans on which we are surviving. Our gap till September 2011 is about Rs3,100 crore, of which bank loans amount to Rs2,400 crore. If there is some equity infusion by both the promoters of Tata Delhi Power, it will ease the situation. The total equity infusion would be according to the 51 per cent-49 per cent stake between Tata and Delhi Government.”
The move apparently comes post NDPL expressed its displeasure over the step motherly treatment meted to it by the Delhi Government, even after they have persistently performed better than the other two private discoms. An NDPL spokesperson said, “After the Government paved the way to provide financial assistance to BSES discoms, we also did not want to be left behind. We had been pressing the Government to take into account our financial position for quite some time. However, things seem easier after the Cabinet gave nod to support the other two discoms.”
After providing Rs500 crore equity to the BSES power distribution companies, the Delhi Government has no option but to infuse Rs245 crore in the form of equity in Tata Power Delhi Distribution Limited (NDPL). According to a top power official, another cabinet discussion is likely to happen on Monday and like BRPL and BYPL, CAG will audit the accounts of NDPL as well. The move comes after the Tata-backed discom approached the Government with a proposal on Tuesday to infuse funds in form of equity to improve its financial position.
A top notch power official said, “We cannot overlook the Tata-backed discom as it is also in a bad shape. They have performed better as the parent company could muster resources to handle the internal cash flow. According to the shareholders agreement, the Government will infuse 49 percent of Rs500 crore and the rest 51 per cent, i.e Rs255 crore will have to be provided by Tata. However, we will not let this burden the consumers of Delhi and a 35 per cent tariff hike next year is atrocious. The Government’s efforts will be to save the consumers from bearing the brunt of the financial position of the power discoms.”
However, not all power officials agree on the fact that the move to infuse funds as equity share would not hurt the power consumers of Delhi. A source in power department said, “The equity assistance will definitely percolate to the power consumers of the Capital in the form of tariff hike. Though 35 per cent tariff hike is speculated, it could be more if the discoms are able to manipulate the Government. Even the Electricity Regulator (DERC) has not been prudent enough and therefore still hasn’t received any plan from the BSES as to how they plan to liquidate their assets. Only the CAG audit of the accounts of BRPL and BYPL will reveal as to how these companies have incurred exorbitant debts of over Rs3,000 crore with various power generating and transmission companies.”
Chief Executive Officer, Sunil Wadhwa, NDPL, while admitting that there was no urgent need for an equity infusion, added that through the infusion they are looking at long-term recovery. He said, “We do not want to wait for a crisis to arise and become defaulters. The banks have been generous enough to provide us loans on which we are surviving. Our gap till September 2011 is about Rs3,100 crore, of which bank loans amount to Rs2,400 crore. If there is some equity infusion by both the promoters of Tata Delhi Power, it will ease the situation. The total equity infusion would be according to the 51 per cent-49 per cent stake between Tata and Delhi Government.”
The move apparently comes post NDPL expressed its displeasure over the step motherly treatment meted to it by the Delhi Government, even after they have persistently performed better than the other two private discoms. An NDPL spokesperson said, “After the Government paved the way to provide financial assistance to BSES discoms, we also did not want to be left behind. We had been pressing the Government to take into account our financial position for quite some time. However, things seem easier after the Cabinet gave nod to support the other two discoms.”
