Power bonds worth Rs 10k cr ready to hit debt market
An additional tranche of Rs 10,000 crore of power bonds are expected to hit the debt market soon, with the government close to a deal to clear the balance sheet of the erstwhile Delhi Electric Supply Undertaking (DESU).
By Subhomoy Bhattacharjee & Urmi A Goswami, TNN |
NEW DELHI: An additional tranche of Rs 10,000 crore of power bonds are expected to hit the debt market soon, with the government close to a deal to clear the balance sheet of the erstwhile Delhi Electric Supply Undertaking (DESU).
The finance and power ministries may approve a package to securitise the past dues of DESU by the issue of these power bonds, which has been hanging fire for close to four years.
The exact amount is yet to be worked out, and it could touch the Rs 12,000 crore mark. It will depend on the amount owed to the various central power sector undertakings such as the Badarpur Thermal power station, various NTPC power plants, Coal India and the railways.
The final amount will also depend on the interest rate that will be levied as the dues have accumulated from 1954, when DESU was set up, to 1997, when it was restructured to form the Delhi Vidyut Board (DVB). Once approved, the proposal will be incorporated in the second supplementary budget for this fiscal, due in the winter session.
Power bonds of about Rs 29,000 crore were also issued earlier to securitise the dues of several SEBs to central power utilities, under a formula worked out by the then member Planning Commission, MS Ahluwalia.
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In April, the Cabinet deferred taking a decision on the proposal to settle the outstanding dues of DESU. The matter had been referred to a committee of secretaries comprising power secretary, home secretary, and finance secretary.The securitisation of DESU arrears has been hanging fire as the Delhi government was unwilling to securitise amount. It argued that government of the national capital territory of Delhi was not mananging DESU.
The erstwhile power utility was under the MCD, which was under the jurisdiction of the union home ministry, hence the respinsibility of securitising arrears lay at the door of the central government.
For its part, the central government has argued that since DESU did consume the power it was the arrears were the responsibility of the Delhi government.
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