MeECL to pay Rs 10.65 Cr monthly as interest for ABA loan

Syllad | The Rising MeghalayaMarch 16, 2021

The Meghalaya Energy Corporation Limited (MeECL) will have to pay a monthly interest of Rs 10.65 crore against the Rs 1,345.72 crore loan sanctioned by the Centre under the Atmanirbhar Bharat Abhiyan.

This was informed by the Minister in-charge Power James K Sangma in his reply to a query raised by Rangsakona legislator Zenith Sangma on the issue in the Assembly on Tuesday.

He said of 1,345.72 crore, 672.86 crore was sanctioned by the REC Ltd and Rs 672.86 by the Power Finance Corporation Ltd. 

The total amount of loan availed by the MeECL (so far) is 386.86 crore of which 193.43 crore from REC Ltd and 193.43 crore from Power Finance Corporation Ltd, he added. 

Zenith wanted to know if it is advisable to avail this loan since the rate of interest to be paid for the loan is 9.5% or Rs 10.65 crore monthly in view that the MeECL also have other debts. 

He felt that if repayment of the debts is more than the revenue generated, the state own company will not be able to sustain. This is because payment of principal amount along with interest will come to around Rs 20-30 crore monthly. 

Admitting to this, the minister said it is true that the MeECLhas lots of debts but the government of India came up with the Atmanirbhar Bharat Abhiyan loan for discom (distribution companies) facing distress. 

“Therefore, we took a call…to avail this loan (which is) at low rate of 9.5% percent. This was a difficult choice but nevertheless due diligence was done (on this regard),” he stated. 

The minister also assured that the burden to repay the loan would not be passed on to the consumers of the state.

To another query, James said that the present government has inherited this mess in the MeECL and solution to such a long drawn problem will not come within short span of time.

He said the failure of the then Congress-led government to clear terminal benefits has increased the same from Rs 844 crore to over Rs 2,000 crore.

“Today we are trying our level best to ensure there is a turn around to increase our revenue generation and reduce the aggregate technical & commercial (A&TC) losses,” he added.

Further highlighting on the other measures being taken up, the minister said that the state government has gone ahead with smart meters to improve the billing efficiency.