BRPL says financial health precarious

NEW DELHI: With a CAG audit looming over their heads, power utilities in Delhi are now showing their desperation. South Delhi discom BSES Rajdhani has written to Delhi government, painting a case of extreme financial crunch. This, it says, has worsened following the AAP government's move to increase the power subsidy coupled with a delay in announcing a liquidation plan for the regulatory assets (recovery of accumulated dues) by DERC. This, besides the recent media coverage highlighting the government's desire to reduce tariff, has been taken note of by bank lenders who have indicated they would no longer be able to help power companies in meeting debt servicing obligations, the discom has alleged.

The discom has asked the government to expedite setting up of an empowered committee as per DERC regulations in order to asses the discoms' funds flow situation and take appropriate steps as may be recommended by the committee. "In the absence of a non-reflective tariff, the already precarious financial condition of BRPL is worsening continuously, and this has placed an insurmountable pressure on our ability to make payments to generating companies/transmission companies for power supplies,'' pleaded the discom, saying there was a critical and urgent need to set up the empowered committee immediately.

According to the claims made by BRPL, the cumulative shortfall in tariff till financial year 2012 - recognized by DERC in its tariff order of July 2013 - was Rs 5205.52 crore.

The discom said this cumulative shortfall in revenue could be met through short-term borrowings and build-up of creditors for power supply and other goods and services.

The DERC had ordered formation of an empowered committee in an order last year in November that would assess the inflow of funds and decide the priorities for utilization/application thereof. "This committee would have an equal number of representatives from both the discoms and the government who would help settle the dispute of payments to be made by discoms to gencos and transmission companies. The government has claimed that the discoms were regularly defaulting on payments to IPGCL, PPCL and Transco while they were making payments to other entities. There should be no such grievance and the committee would decide the priorities of payments to be made,'' said DERC sources. The committee was to meet every 15 days. BRPL said that despite regular follow-ups from their side after the DERC order, the government had still not indicated any response towards nomination of government representatives for the empowered committee.

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