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Telangana: After Proposed Power Reforms not Implemented Centre Halts Rs 20,000 Crore Loans for TSGENCO

According to a report the Union Ministry of Power has asked the state energy department to install smart meters for all electricity connections in the state.
Telangana: After Proposed Power Reforms not Implemented Centre Halts Rs 20,000 Crore Loans for TSGENCO

Representational Image. Image Courtesy: New Indian Express

Hyderabad:The Power Finance Corporation (PFC) and Rural Electrification Corporation Limited (REC) have stopped funding to the tune of Rs 20,000 crore to the Telangana State Generation Corporation (TSGENCO) on directions from the Union Ministry of Power as earlier agreed since power sector reforms were not implemented in Telangana, Telugu daily Eenadu reported.

Bharat Heavy Electricals Ltd (BHEL) is behind two power projects – the 4x270 MW Bhadradri Thermal Power Project in Bhadradri, Kothagudem district and the 5x800 MW Yadadri project – for TSGENCO. PFC and REC had earlier signed memorandums of understanding (MoUs) with TSGENCO for granting loans to the tune of Rs 35,000 crore for the two projects. Of the total agreed grants, national financial institutions have granted Rs 15,000 crore in several installments so far. However, the remaining Rs 20,000 crore has been stopped.

It is not clear why the central government is linking power reforms to loans which were agreed in 2015,” Eenadu quoted a senior official of TSGENCO as saying.

Sources told Newsclick that in a recent meeting, officials from the power ministry had told the state’s energy department that the funding from national financial institutions will be granted only if reforms are implemented to improve financials of the loss-making power distribution companies (discoms) and see to the installation of smart meters for all electricity connections in the state.

If the central government takes unilateral decisions on power reforms without consulting the state government then why is the electricity sector under the Concurrent List in the Constitution,” asked P. Ratnakar Rao, Chief Engineer at TSGENCO and the general secretary of the All India Power Engineers Federation.

He said that the Centre was pushing for reforms at the behest of corporate players. “The BJP government at the Centre is aiming to privatise distribution companies, especially in urban areas,” said Rao. “These reforms are in tune with the draft Electricity (Amendment) Bill and are only intended for the privatisation of the sector. While reforms are needed for the sector, the Centre has to consult employees federations and state governments for better solutions,” he added.

In September last year, the Telangana Assembly had passed a resolution against the Electricity (Amendment) Bill. Telangana is among the states which did not implement the entres’ power reforms of linking power subsidies for farmers with the direct benefit transfer scheme, reducing aggregate technical and commercial (AT&C) losses of discoms and reducing gap between average cost of supply and average realisable revenue.

On February 3, over 27 lakh electricity workers and engineers were on a one-day strike against the Electricity (Amendment) Bill and Standard Bidding Document put out by the Union power ministry.

All sections of power sector employees under the banner of National Co-ordination Committee of Electricity Employees and Engineers (NCCOEEE) will resist the Central Governments plans to privatise the power sector,” said Rao.

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