Maharashtra energy minister seeks Rs 10,000 cr from Centre grant for state discom

Maharashtra energy minister Nitin Raut has sought Rs 10,000 crore as grant from the Centre for state discom Mahavitaran, stating the utility faced huge financial losses due to decline in collections during the coronavirus-induced lockdown.

"During the three months of complete lockdown, electricity bill collection had dropped significantly. This has resulted in a financial burden on Mahavitaran," Raut said in a statement issued by the discom.

According to a Mahavitaran official, the discom suffered losses to the tune of Rs 7,000 crore during the three months of lockdown.

"Providing uninterrupted power supply to consumers is an essential service. However, since the discom is making huge losses, we have sought Rs 10,000 crore grant from the Centre to come out of the financial stress," Raut said in a letter to Union Power Minister R K Singh.

Raut has also sought concessions in electricity bills for its consumers stating that the lockdown had adversely impacted the financial abilities of the customers as businesses had come to a complete standstill.

Of the total revenues of Mahavitaran, nearly 60 per cent comes from its commercial consumers which are used to cross subsidise the residential and agricultural customers.

"The lockdown has impacted revenues of Mahavitaran as the commercial establishments were shut. However the discom continued to incur administrative costs as well as the cost of purchasing power. The discom also borrowed Rs 500 crore for meeting operational expenses.

"Already, it is paying Rs 900 crore in interest on borrowings of Rs 38,282 crore which are deployed for strengthening the distribution infrastructure in the state," Raut said in the letter.

He further said that since the discom has not received a favourable response from the banks and financial institutions, Mahavitaran would need a financial assistance of Rs 10,000 crore from the Centre.

According to a recent report by Emkay Global Financial Services, the total outstanding of discoms to gencos and transcos is to the extent of Rs 8,400 crore as of April 2020.

The report said that the discom has sought Rs 5,000 crore from the government under the Rs 90,000 crore package announced by Finance minister Nirmala Sitharaman, which has also been sanctioned. Raut, however, claimed that the discom has not received any benefit of the Rs 90,000 crore package yet.

(Photo Credit: PTI)