27 C
New Delhi
Wednesday 8 April 2020

UP joins UDAY, will gain Rs 33,000 crore

Editorials

In India

Lockdown may be extended with ‘change in work style’

While the parties were near anonymous about extending the lockdown, Prime Minister Narendra Modi raised the concerns of DBT and emphasised the need to work differently to run the economy

Lockdown to end on schedule, hints PM; list 10 KRAs, union ministers told

Today's meeting of the prime minister with his colleagues in the union ministries raises hope for the economy even amid the apprehension that the nation might not be able to break the chain of the COVID contagion by 14 April

New Delhi: The Government of India, the State of Uttar Pradesh and Uttar Pradesh Power Corporation Limited (UPPCL), on behalf of DISCOMs of Uttar Pradesh (Dakshinanchal Vidyut Vitran Nigam Limited, Kanpur Electric Supply Company Limited, Madhyanchal Vidyut Vitrran Nigam Limited, Paschimanchal Vidyut Vitran Nigam Limited and Purvanchal Vidyut Vitran Nigam Limited) signed a Memorandum of Understanding (MoU) under the Scheme UDAY – “Ujwal DISCOM Assurance Yojana” here today for operational and financial turnaround of the DISCOMs. The signing ceremony was held in the august presence of the Minister of State (IC) for Power, Coal & New and Renewable Energy Piyush Goyal.

Uttar Pradesh has joined the list of States that have accepted UDAY for bringing about a positive change in the power sector scenario of the States. Rajasthan, Chhattisgarh and Jharkhand have already signed the MoU under UDAY.

The distribution utilities of the country are reeling under heavy debt burden. As on 30 September 2015, the outstanding debt of the DISCOMs stood at Rs 4.3 lakh crore. In order to bring relief to these Utilities from the burden of debt, and to improve their overall performance, Government of India launched the scheme UDAY on 20 November 2015, after a series of discussions with all the stakeholders, namely the State governments, DISCOMs, lenders etc. UDAY is an aim to ensure a permanent solution to the debt-ridden Distribution utilities to achieve financial stability and to improve their operational efficiencies, for sustained growth.

Uttar Pradesh has taken a major step towards improving the financial health of the DISCOMs by signing the MOU under UDAY and agreeing to take over the debt of the DISCOMs. The Government of Uttar Pradesh would take over Rs 39,900 crore. of DISCOM debt, being 75% of the total DISCOM debt of Rs 53,200 crore outstanding as on 30 September 2015, as envisaged in the scheme. The scheme also provides for the balance debt of Rs 13,300 crore. to be re-priced or issued as State guaranteed DISCOM bonds, at coupon rates around 3% less than the average existing interest rate. The annual saving in the interest cost to the DISCOMs would be around Rs 1,600 crore. on account of State take-over of debt and reduction in interest rates on the balance debt.

Besides helping the DISCOMs to bring about financial turnaround, UDAY lays stress on improving operational efficiencies of the DISCOMs. During the period of turnaround, the State of Uttar Pradesh and the DISCOMs will bring about operational efficiency through compulsory Feeder and Distribution Transformer metering, consumer indexing & GIS mapping of losses, upgrade/change transformers, meters etc., smart metering of high-end consumers, thereby bringing about reduction in transmission and AT&C losses, besides eliminating the gap between cost of supply of power and realisation. The reduction in AT&C losses and transmission losses to 15% and 3.95% respectively is likely to bring additional revenue of around Rs 17,700 crore. during the period of turnaround.

With the financial turnaround through financial and operational efficiencies, the rating of the DISCOMs would improve, which would help them in raising cheaper funds for their future capital investment requirement. This is expected to provide interest cost saving of around Rs.200 crore. to the DISCOMs.

While efforts will be made by the State government and the DISCOMs to improve the operational efficiency of the DISCOMs, and thereby reduce the cost of supply of power, the Central government would also provide incentives to the DISCOMs and the State Government for improving Power infrastructure in the State and for further lowering the cost of power. The Central schemes such as DDUGJY, IPDS, Power Sector Development Fund or such other schemes of MOP and MNRE are already providing funds for improving power infrastructure in the State and additional/priority funding would be considered under these schemes, if the State/DISCOMs meet the operational milestones outlined in the scheme. The State shall also be supported through additional coal at notified prices and in case of availability through higher capacity utilization, low cost power from NTPC and other CPSUs. Other benefits such as coal swapping, coal rationalization, correction in coal grade slippage, availability of 100% washed coal would help the state to further reduce the cost of Power. The State would gain around Rs.5600 crore. due to these coal reforms.

Energy Efficiency is also one of the focus areas of UDAY. In order to help reduce the peak load and reduce energy consumption the State of Uttar Pradesh, the State Government and the DISCOMs would promote usage of energy-efficient LED bulbs, agricultural pumps, fans & air-conditioners, efficient industrial equipment through PAT (Perform, Achieve, Trade) etc. The saving is expected to be around Rs.3500 crore.

The ultimate benefit of signing the MOU would go to the people of Uttar Pradesh. Higher demand for power from DISCOMs would mean higher PLF of Generating units and therefore, lesser cost per unit of electricity thereby benefitting consumers. The DISCOMs would also increase power supply in areas with reduced AT&C losses. The scheme would allow speedy availability of power to around 490 villages and 143.54 lakh households in Uttar Pradesh that are still without electricity. Availability of 24×7 power to hitherto unconnected villages/households etc. would boost the economy, promote industries, thereby improving employment opportunities and see Uttar Pradesh develop into one of the leading industrialised States in India.

Uttar Pradesh would derive an overall net benefit of approximately Rs 33,000 crore. through UDAY, by way of savings in interest cost, reduction in AT&C and transmission losses, interventions in energy efficiency, coal reforms etc. during the period of turnaround.

UDAY is hence an effort not only to make the DISCOMs financially and operationally healthy, but also enable the Government to brighten and transform the lives of millions of people.

On the occasion of the ceremony, Goyal also unveiled the logo of UDAY.

Coronavirus worldwide update, with focus on India, LIVE

Since the facts and figures related to the novel coronavirus disease 2019 (nCOVID-19, COVID-19 or COVID) are changing by the minute, Sirf News has begun this blog to keep the readers updated with information coming from authentic sources

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

- Advertisement -

Articles

China Is Guilty, But How Will World Retaliate?

The attack has to be calibrated as the world has invested heavily in China and that country, in turn, has markets worldwide, making your own economy vulnerable when you take measures against Beijing

Sewa In COVID Times: Living ‘Service Before Self’ Credo

Sewa International volunteers were first off the starting block, setting up non-medical helplines for the four regional areas — West Coast, East Coast, Midwest, and Southwest — for a coordinated national response, where people can call in for assistance

United States & India: Same COVID, Different Prescriptions

The different social structures, experiences in the leaders of the two countries, variation in the degree of political capital, etc make India and the US react differently to the global COVID pandemic

China Is Guilty, But How Will World Retaliate?

The attack has to be calibrated as the world has invested heavily in China and that country, in turn, has markets worldwide, making your own economy vulnerable when you take measures against Beijing

Sewa In COVID Times: Living ‘Service Before Self’ Credo

Sewa International volunteers were first off the starting block, setting up non-medical helplines for the four regional areas — West Coast, East Coast, Midwest, and Southwest — for a coordinated national response, where people can call in for assistance

United States & India: Same COVID, Different Prescriptions

The different social structures, experiences in the leaders of the two countries, variation in the degree of political capital, etc make India and the US react differently to the global COVID pandemic

For fearless journalism

%d bloggers like this: