Union Power Minister Piyush Goyal said that following his meeting with Tamil Nadu Chief Minister J.Jayalalithaa last week, he is hopeful that the state will join the Uday debt restructuring scheme for electricity distribution companies.
“We had constructive discussions in Chennai on the Uday (Ujwal Discom Assurance Yojana) scheme with the Tamil Nadu Chief Minister along with concerned state ministers and around 30 state officials present,” Goyal told reporters here.
“Following these talks, I am hopeful that Tamil Nadu will come on board and sign Uday,” said the minister, who had earlier spoken of the difficulty in contacting Jayalalithaa on the matter.
The Tamil Nadu Chief Minister told Goyal on Friday that a team headed by the state electricity minister will visit Delhi to discuss the scheme.
She told Goyal that she had already requested Prime Minister Narendra Modi, in her letter dated October 23, 2015 to consider certain requests of the state government to ensure that the state finances are not adversely affected, while taking over the debt of state distribution company TANGEDCO.
She also requested that the state-run Rural Electrification Corporation (REC) and Power Finance Corporation (PFC) may extend co-operation by providing loans for both revenue and capital expenditure and also for the new power projects proposed by Tamil Nadu.
Goyal had said here last week that the central government has extended the date for states to join Uday to enable those like Tamil Nadu, which are doubtful of its benefits, to sign on.
“I only feel very sad for the people of Tamil Nadu, because Uday will save Rs 22,400 crore of discoms’ debt in the next three years,” he had told reporters.
The union cabinet last month extended till March 31, 2017, the date for joining Uday, which has been signed by 18 states and one union territory so far.
Uday envisages taking over 75 per cent of discoms’ cumulative debt. States would issue loans against the debt at prevailing market rates. The balance 25 per cent would be issued as sovereign backed bonds by discoms.
The scheme also envisages access to cheaper coal, modernising transformers to cut distribution losses, as well as a provision to revise tariffs, which has been criticised by the AIADMK government in Tamil Nadu.
Noting how states like Rajasthan, Uttar Pradesh, Bihar and Haryana are benefiting significantly from Uday, Goyal said that Tamil Nadu would eventually have to pay off its discom debts because even banks have been instructed not to fund in this regard.