State utility may insist on advance payment by govt
Even as the government on Tuesday decided to reimburse Rs 1,300 crore to MahaVitaran towards the cost it would incur in buying an additional power for over next four months, the utility is insisting on full advance payment.
By Girish Kuber, TNN |
MUMBAI: Mahavitaran, the state-owned power utility, doesn’t seem to trust the Maharashtra government. Even as the government on Tuesday decided to reimburse Rs 1,300 crore to MahaVitaran towards the cost it would incur in buying an additional power for over next four months, the utility is insisting on full advance payment.
The Vilasrao Deshmukh Cabinet, at a special meet on Tuesday, permitted the power utility to buy around 600 mw power per day to meet the current deficit. It, however, maintained silence on how and when it would pay its power purchase arm to fulfil its commitment.
Being produced on naphtha, the most expensive fuel, this power will come at a huge premium of Rs 8.30 per unit. This means the utility will have to fork out Rs 341 crore per month over the next 4-5 months. MahaVitaran has already made it clear that it’s not in a position to buy power at this rate unless supported by the state.
Taking note of its tough stand, the state Cabinet today was left with no other option but to accept MahaVitaran’s argument for budgetary support. The ministers agreed to share the power utility’s additional finance burden. This, however, has hardly brought any cheer to the utility.
“MahaVitaran is keen on upfront payment by the state government before it actually starts buying additional power from other states to tackle the ongoing crisis,” a top finance department official told ET on Tuesday.
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The power utility’s insistence comes in the backdrop of the state’s earlier failures in honouring commitments. “Over the years, the state’s budgetary support for the power utility has been diluting steadily. Even today, the state is unsure of the way it’s going to raise money to pay the power bill,” an official said.Twice it happened that the state asked the utility to buy additional power, but conveniently failed to provide any budgetary support. “This time MahaVitaran is financially weaker than in the past. Any delay or refusal by the state to keep up its promise is bound to take the utility closer to closure. Now, it doesn’t want to take any chances,” a highly-placed official said.
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