Nasir Azam
Srinagar: In a move of far-reaching implications for public finances in Jammu & Kashmir, Jammu & Kashmir administration is raising Rs 4580 crore special long term loan from the Government of India for clearing its power purchase liabilities.
Documents accessed by news agency—Kashmir News Observer(KNO) reveal that Power Finance Corporation(PFC) and Rural Electrification Corporation(REC) have agreed to grant Rs 2290 crore each as special long term loan to J&K to assist it in clearing the power purchase liabilities of different central power generation companies like National Thermal Power Corporation Limited (NTPC), National Hydroelectric Power Corporation(NHPC) and charges of transmission companies.
The documents reveal that J&K owes Rs 9646 to various power companies on account of power purchases and transmission charges.
Under the package, the Union government has allocated Rs 90,000 crore financial package to assist power distribution companies (Discoms) who have been under stress during the lockdown caused by COVID-19 pandemic.
The Power Finance Corporation and Rural Electrification Corporation would extend special long term transition loans up to 10 years to DISCOMs. According to the documents, the 10-year loan has three-year moratorium period and is repayable in 84 EMIs (Equated Monthly Installments).
The package has been sanctioned at a time when J&K is struggling to clear liabilities of Central Public Sector Undertakings (generating companies), Transmission Companies and Independent Power Producers.
Now, the administration is required to execute Memorandum of Agreement (MoA) with PFC and REC to avail the loan.
In 2016, J&K joined Ujjwal DISCOM Assurance Yojana (UDAY) scheme. Under the scheme, the State Government was permitted to restructure the outstanding debt of Rs.3537.55 crore on account of power purchased from various Central Public Sector Undertakings (CPSUs).
J&K power purchase liabilities are swelling due to massive gap between power purchases and revenue generated from consumers. —(KNO)
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