Haryana News- Haryana power minister urges Centre to modify pricing formula suitably

New Delhi/jalandhar, September 10, 2013: Haryana Power Minister Capt. Ajay Singh Yadav has urged the Union Government to suitably modify the pricing formula for the bonds so that the net rate for issue of bonds by the power utilities does not exceed the indicative rate of 8.9 percent.

He was speaking in the 7th Power Ministers Conference at New Delhi on Tuesday organised by Union Ministry of Power to deliberate the critical issues concerning Power sector. He said that Financial Restructuring Plan (FRP) of the state discoms has been approved by the State Cabinet. The state level monitoring committee has been constituted. Under the scheme the state government would take over liabilities of about Rs.7381 crores.

The FRP envisages issuance of bonds by the discoms against 50 percent short terms liabilities to be taken over by the State Government. As per the methodology for the bonds specified by Union Power Ministry, the indicative rate of interest on bonds to be issued by the discoms was given as 8.9 percent. However, due to increase in yield of Government securities, the effective rate of interest on bonds, as per the formula, has gone up to 10 percent. In  view of the present financial health of the discoms, they could not absorb such a high rate and as such none of the states except Tamil Nadu, has so far issued the bonds, he added.

Capt. Yadav said that at present Haryana is power surplus state and the this situation would continue for the next 2-3 years. However, due to increase in the demand particularly in the NCR region, the state would have to plan for additional power availability in the later years. To cater to the increase demand of power, the state government would source power through bidding so that the power is available for next three years. He said that fuel linkages are required for bidding and presently, the coal linkages are not being given to private generators by Ministry of Coal and as such the bids for power could not mature. He requested the Union Ministry to allocate additional coal blocks to the State Government for initiating the process of inviting bids for power.

He said that Haryana has completed 87 percent electrification work under Rajiv Gandhi Grameen Vidyutikaran Yojna (RGGVY) and the entire work would be completed within next six months. He said that the State Government has launched Priyadarshni Aawaas Yojna, wherein 100 square Yard plots are being allotted to the weaker sections, scheduled castes and backward classes residing in Haryana. An expenditure of Rs.255 crore is envisaged for providing distribution infrastructure in these colonies. He said that in a written statement, Haryana Chief Minister Bhupinder Singh Hooda has urged the Union Power Minister for covering electrification of such hamlets under RGGVY but it has not been approved yet on the ground that for coverage of Dhanies under RGGVY, population as per 2001 census is considered. He said that in all the colonies being developed under Priyadarshni Aawaas Yojna, the population would be more than 100 and therefore he requested to grant approval to cover this scheme under RGGVY.

He said that implementation of R-APDRP projects would be completed as per schedule. Also, a smart grid project is being implemented in Panipat City. He said that the quality of coal supplied by Coal India and its subsidiaries to thermal power plants of state is often found to be in variance with the quality tested at receiving end. The actual Gross Calorific Value (GCV) of coal received at stations is less and inferior than billed GCV by Coal India. He requested, the Union Ministry of Coal to take up the matter as inferior quality of coal has a direct impact on the tariff for the consumers of the state.