Power Ministry proposes waiver to power plants from advance freight, coal payments

The power ministry has asked the coal and railways ministries to exempt power plants from advance coal and freight payments for three months, in order to avoid electricity supply disruptions amid Corona virus pandemic.

A senior ministry official said the short-term dispensation was requested by private power companies that constitute 35% of Indian electricity generation base as they cited cash crunch due to non-payment by discoms. State and central generating companies including NTPC also face the problems but the power ministry on Friday directed them to supply electricity to even defaulting state electricity distribution companies through a three- month moratorium.

The official said power minister R K Singh has written to coal minister Pralhad Joshi and railways minister Piyush Goyal seeking the exemption for three months to maintain electricity supply as the country remains in lockdown till April 14. The Reserve Bank has allowed financial institutions to give a moratorium of three months on repayment of loans, however Covid-19 poses a challenge in terms of recovery of dues from state electricity distribution companies.

A coal ministry official said the power ministry’s demand was being evaluated though with Rs 14,000 crore outstanding receivables from state run power projects, Coal India is stretched for funds. “Realisations from them are likely to be long-drawn under the present challenging times,” he said. A railway ministry official said they were yet to receive communication from the power ministry.

ET reported on March 24 that Covid-19 is expected to have a major impact on India’s power sector with distribution companies halting payments to generation companies as states electricity departments are not taking coercive actions to recover bills from consumers. Recovery of electricity dues by state discoms takes place in a big way in March every year.

According to the Praapti portal of the Union power ministry, the outstanding amount of discoms stands at Rs 86,931 crore, of which Rs 76,063 crore is overdue.

ET News
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