PM Modi to review performance of power producers today

New Delhi :Prime Minister Narendra Modi has called a meeting of power producers like NTPC and NHPC today to review their performance.

“The Prime Minister has called a meeting of power producers on Tuesday to review their performance and assess expansion plans in future,” a source said.

The meeting comes a day after the Prime Minister met top brass of state electricity distribution companies (discoms), to review their performance and discuss the issue of their burgeoning debt.

The agenda of today’s meeting was to find ways to reduce financial losses of these discoms and dealing with increasing debt so that these could buy power from generation firms.

Power producers are running their plants on lower plant load factor as a large number of electricity distribution companies are cash strapped due to mounting losses and debt.

The combined debt of power distribution companies (discoms) stands at over Rs 3 lakh crore. Faced with acute financial stress, many of these are unable to buy power.

The power generation companies are scheduling their production in accordance with the demand of electricity which has come down as discom are unable to buy due to fund crunch.

Speculations were rife that a bailout package may come for debt-ridden discoms so that the government can achieve the goal of providing power to all.

However, last month, Power Minister Piyush Goyal had ruled out any financial package for discoms, saying the government of India cannot be considered as “a bailout bank” and the states would have to find the solution.

“Some states have serious crisis (power) looming large. But at the end of the day, the Government of India can only facilitate the turnaround of these discoms and we cannot finance it,” he had said.

On extension of the financial restructuring package (FRP), the minister had said, “The government has not finalised any such extension of the old plan.”

Originally introduced in April 2012, the three-year long FRP was implemented in October 2013.

In an attempt to restore power-purchasing capacity of the debt-heavy discoms and enable banks to recover their loans, the Cabinet Committee on Economic Affairs had approved the scheme for financial restructuring of the state discoms in September 2012.