 "Jharkhand opts for discom package, starts unbundling power board")
New Delhi: Jharkhand has started the process of disintegrating its electricity board, a mandatory step for undertaking the Financial Restructuring
Package (FRP) aimed at nursing back ailing discoms to health.
In order to avail the Centre-backed FRP for debt-laden power distribution companies (discoms), states have to approach the Ministry of Power latest by 31 July.[caption id=“attachment_946339” align=“alignleft” width=“380”] Changing power distribution system. Reuters[/caption]
On asked whether Jharkhand will be able to meet the deadline, a power ministry official said, “They (Jharkhand) have said they are confident of completing the unbundling process within this month and will be able to apply for the FRP.”
Unbundling state electricity boards (SEBs) means breaking it down into separate entities for power generation, transmission, distribution and trading business.
Only an entity involved in power distribution will be able to take part in the debt recast plan.
Kerala has also come forward for the debt recast plan but power utilities there are yet to be unbundled.
“They (Kerala) want to make use of the debt restructuring plan but will have to unbundle the state electricity board failing which they cannot apply,” the official added.
As per the debt recast plan, the state governments will take over 50 percent of the outstanding short-term liabilities of the discoms, up to 31 March 2012.
The debt would then be converted into bonds to be issued by discoms to participating lenders, duly backed by state government guarantee.
So far the states of Bihar, Andhra Pradesh, Uttar Pradesh, Tamil Nadu and Haryana have come forward to avail the scheme. Himachal Pradesh and Meghalaya have also evinced interest, according to sources.
The accumulated losses of the state power distribution companies (Discoms) are estimated to be about Rs 1.9 lakh crore as on 31 March 2011.
PTI
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