The newly-formed Congress government in Telangana on Thursday blamed it on the previous Bharat Rashtra Samithi government for pushing the state power sector into deep financial distress leading to the bankruptcy of Discoms.
State finance minister Mallu Bhatti Vikramarka presented a white paper on the financial position of the Telangana power distribution companies (Discoms) in the state assembly, describing the financial health of the power sector is precarious and is a matter of grave concern.
According to the white paper, at the time of formation of the state the installed generation capacity of TSGENCO was 4365.26 MW. Prior to the formation of the state itself, generation projects have been conceived/ initiated with a capacity of 2,960 MW.
The commissioning of these projects after the formation of the state has been critical in providing reliable power supply. In addition, special provisions in the A.P. Reorganisation Act 2014 regarding power sector enabled the state to get over 1,800 MW power beyond the installed capacity in the state at that time.
“After formation of the state, only one power project of 1,080 MW capacity was conceived and commissioned at Bhadradri Thermal Power Stations (BTPS) with inordinate time and cost overrun using subcritical technology,” Bhatti said.
Another power project of 4,000 MW in Nalgonda District (Yadadri Thermal Power Station) was taken up at a location far removed from the coal mines leading to avoidable coal transport costs of over Rs. 800 crore per annum which are liable to further escalate with time and will be applicable over entire life time of the project.
The accumulated losses of Discoms as on March 31, 2023 stand at Rs 62,461 crore. Discoms have a debt of Rs 81,516 crore as on October 31, 2023. Of this, an amount of Rs. 30,406 crore has been borrowed as working capital primarily to pay power charges to 29 the generators.
“Despite this, an amount of Rs. 28,673 crore of generation and transmission dues remain to be paid by Discoms,” he said.
The difficulty faced by Discoms in paying power purchase bills has been aggravated by the default of government in paying the power bills of its own departments which have now mounted to Rs 28,842 crore.
“Of this, the amount due from lift irrigation projects alone is Rs. 14,193 crore. The government’s default in paying committed true up charges of Rs 14,928 crore has further contributed to the further deterioration of Discom finances,” Bhatti said.
In these circumstances, merely to keep the power supply going, discoms are resorting to borrowings on a regular basis which have reached unsustainable proportions. There is very limited scope to continue to fund the purchase of power through these means.
“Discoms are now finding themselves in debt trap due to failure of government in paying its dues and commitments to the sector,” the finance minister added.
