Govt allows MeECL to avail loan of Rs 1,345 Cr for clearing outstanding power dues

Syllad | The Rising MeghalayaAugust 14, 2020

The state Cabinet on Friday approved the proposal to allow the Meghalaya Energy Corporation Limited (MeECL) to avail a loan up to Rs 1,345.72 crore for clearing the power outstanding dues, on conditions that it has bring down the aggregate technical & commercial (AT&C) losses and reduce the gap of average cost of supply (ACS) and average revenue realized (ARR).

Speaking to reporters after the meeting, Power Minister James K Sangma said the Meghalaya Power Distribution Corporation Limited (MePDCL) of the MeECL has a very huge outstanding against the power purchased dues payable to the central power generating stations and to the Power Grid Corporation of India Limited (PGCIL).

According to him, the revenue collection of the MePDCL has also been adversely affected by the unprecedented COVID-19 pandemic.

He said in view of this, there has been a notification by the Government of India, wherein it has announced that the Aatma Nirbhar Bharat Abhiyaan (ANBA) scheme to infuse liquidity to stress discom (distribution companies) in the form of loans backed by a state government guarantee would be given to clear the liabilities of the gencos (generation companies) and transcos (transmission companies) by the state discom.

Under this scheme, the Rural Electrification Corporation (REC) and the Power Finance Corporation would extend special long term transition loan up to 10 years to the discom on certain conditions.

“Therefore, the Cabinet has approved the proposal to allow the MePDCL to avail the assistance restricted to Rs 1,345.72 crore under the ANBA scheme,” Sangma said.

‘With this loan amount, the MePDCL would be able to clear all outstanding dues to the public sector undertakings, namely the generation companies like NEEPCO, NTPC, OTPC and transmission companies like the PGCIL,” he added.

The Power Minister however said that cabinet has agreed to the proposal based on certain conditions which include the constitution of a High Powered Committee (HPC) which will consist of the state chief secretary, senior most secretaries of the finance, planning and power departments.

“The HPC would be formed to monitor the performance of the MePDCL on two major sector reforms namely to bring down the AT&C losses and to reduce the gap of the ACS & ARR and also to oversee the additional industry sales and additional exchange sales of power through which the MePDCL could earn additional revenue. The HPC would meet every month and would make recommendations to the Board of the MeECL towards achieving the targets,” he informed.