Govt to issue Rs 7000 Cr public bonds to liquidate liabilities
After receiving a notice from NTPC threatening to curtail 1000 MW power supply to the State from February 18 midnight for payment default, the government is likely to issue public bonds worth Rs 7000 crore to liquidate its liabilities.
Sources said the government would negotiate with NTPC and is likely to make “certain payments” in the coming days.
“It is a procedural process to send a notice after you are late in making payments. The government will negotiate with the company,” sources said. “There will be no curtailment.”
On Monday, India’s largest power generator NTPC issued a notice to the State government to regulate power supply from February 18 midnight for not clearing outstanding dues of more than Rs 1600 crore.
In the notice, the company said that as much as Rs 1626.01 crore was due for over 60 days and according to the power regulator CERC's guidelines, generators can serve notice for regulation of power to defaulters.
NTPC has been supplying around 940 MWs of power to the State from various power stations.
The Valley faces a peak deficit of 1000 MWs of electricity during winter months.
Against the projected demanded of about 4000 MWs of power supply, the State’s current power capacity stands at around 2800 MWs of which around 2000 MWs is provided by various projects from the central sector.
J&K can lose supply of 939.03 megawatts of power supply from NTPC's plants including Dadri, Koldam, Farakka, Auraiya, Rihand and Unchahar.
Sources said PDD would issue bonds of Rs 7000 crores to liquidate liabilities of the department, which have been going up with every passing year.
“There are already some payments made to NTPC. There was a total due of Rs 1985 crore of which Rs 1626 crore are outstanding for more than 60 days,” the sources said.
On March 15, 2016, Jammu Kashmir signed a Memorandum of Understanding (MoU) with Ministry of Power, Government of India to save the State Rs 9800 crore in the long run as it promised to undertake a series of reforms and issue power bonds worth about Rs 7000 crore, which were equal to power liabilities of the State.
Development Commissioner J&K PDD, Avinash Dubey said the government would pay the pending amount at the end of this financial year.
“We are not the only state that was served the notice. It is a normal routine and there is nothing to be worried about,” Dubey said.
Dubey said the department was thinking about utilising bonds.