Govt urges Centre to keep in abeyance invocation of TPA

Syllad | The Rising MeghalayaJune 3, 2021

The state government has requested the Centre to release the second tranche of the Atma-Nirbhar loan and to keep in abeyance the invocation of TPA for recovery of the outstanding power dues.

In a letter to the Secretary in-charge Ministry of Power on June 1, Chief Secretary MS Rao said, “…I would request that the TPA invocation be kept in abeyance as we have addressed the concerns raised by you.”

“I would also like to reiterate that invocation of TPA and debiting Rs 123.66 crores from the state account in these trying times when the state government is battling the 2^nd wave of the COVID-19 pandemic which, amongst other things, has adversely affected the finances of the state government will hamper our fight against COVID-19.

This is particularly significant as the number of COVID-19 cases in our state is still high and the state’s finances are already stressed,” he added.

Urging the ministry to release the 2^nd tranche of the Atma-Nirbhar loan at the earliest, the chief secretary said, “This will provide the much needed relief to NEEPCO and other Gencos as well as to our DISCOM.”

His letter was in response to the four issues raised by the Ministry on May 31 regarding discrepancies that need to be rectified by the state government within June 3, failing which the relevant provision of the TPA will be invoked to recover the said dues.

Rao said the outstanding dues as on December 31, 2020 was Rs 50.62 Cr. In this regard, it was already informed through email dated May 11 and letter dated May 17, this year that provisions have been made under the budget of various departments to make the necessary payment to MePDCL for offices under their jurisdiction.

This was done to follow the necessary procedures for payment of bills to the utility. However, since this seems to be a pressing concern for the Government of India Ministry of Power, Finance department of the state government has released an amount of Rs 20 crore to the power power department, he informed.

As the sanction letter mentions, the amount will be utilized to clear off the current dues so that the present outstanding balance stands at Rs 42.03 crore which is lower than the balance at the time of release of the 1^st tranche of the Atmar-Nirbhar loan, he added.

The CS said that the exact subsidy amount to be paid over the period of 3 years has been finalized recently by the state government and the same was communicated to REC vide letter dated May 17.

“Since the budget was already passed, the amount is not reflected in the state budget 2021-22. However, an amount of Rs 20 crore has been made available to clear the amount for the CFY 2021-22 as per the sanction letter attached and budgetary provision shall be made for the following two years in the respective budgets.”

Further, the CS also informed that the state government has made a provision of Rs 20 crore in the budget as at the time of preparation of budget 2021-22 the relevant information was not available with the finance department.

A token amount of Rs 20 crore was however, provided as a cushion for the DISCOM in case it fails to clear the dues partly following general risk weighted approach.

It was also brought to the notice of the REC through the above mentioned letter and email dated May 11, that the finance department will take necessary measures through appropriate budgetary procedures as and when required to make up for the requirement in case the need arises.

It may be noted that an increase in the budgetary provision is possible through additional provision by way of advance from Contingency Fund or Supplementary Demand.

However, for the present an undertaking by the finance department to provide additional funds by way of advance from Contingency Fund or through Supplementary Demand should suffice to address concerns on this issue, he stated.

“An in-principle approval has been made with regard to the structural changes in the distribution company,” he said.

Meanwhile, the CS informed that the finer details for offering Distribution Franchise to REC PDCL are being worked out between REC PDCL and MePDCL.

“Our CMD is currently in Delhi in meetings with REC officials. I am informed that this agreement will be finalized in a weeks’ time,” he stated in the letter.