HC asks Govt to clarify stand on standby row

HC asks Govt to clarify stand on standby row
ENS ECONOMIC BUREAU

MUMBAI, JAN 15: The Mumbai High Court has come down heavily today on the state government to clarify their stance on the ongoing standby charges tussle between the Tatas and BSES. In a hearing on Monday, a division bench comprising of Justic AP Shah and Justice AM Kanwilkar directed the state government councel to file an affidavit before Janauary 22 on their crucial March 22 order.

The state government had issued an order on March 22, 2000 after a detailed report submitted by a 3-member committee instututed for studying the standby issue. The report had clearly stated that BSES has to pay up its dues of around Rs 180 crore to TEC and that there had been 3 reminders issued by the state to BSES asking them to pay up till October last year.

Moreover, the MSEB councel asked for an interim relief of allowing the board to withdraw the amount that has been deposited by BSES before the Maharashtra Electricity Regulatory Commission (MERC). That is because the state had referred the issue to MERC and they had instructed the company to depost some amount till the case is finalised and BSES had deposited Rs 30 crore towards the same. The confusion arose when the state, close on the heels of referring the case to MERC, revoked the March 22 order and instructed that the Commission will start hearings afresh on this case.

The case will come up for further hearing before the HC on January 25. This is for the first time that the High Court is intervening in a case referred to MERC, a quasi-judicial body.

Earlier, MSEB has issued repeated reminders to TEC asking it to pay up Rs 274 crore as arrears towards standby charges. Once the standby facility is withdrawn, the areas where TEC distributes power will be vulnerable to power failures which also include electric suppply to major utilities in the city like suburban trains.

The back-up facility feeds power from the MSEB grid into the TEC system in the event of a breakdown. But a Tata release said that the government had issued an order on March 22, 2000, where it was stated that BSES has to share the standby bill that TEC owes MSEB. In fact, the company has put the ball in the court of government saying that the government had issued an order on March 22, 2000 where it made it clear that BSES has to pay up the arrears they owe TEC.

TEC claims that BSES has consistently avoided making payments even after the government order and that the company has only paid Rs 42 crore and another Rs 30 crore as adhoc advance towards the dues.

The company claims that the outstandings to MSEB is because of BSES's failure to pay the amount due from them towards standby charges, which adds up to over Rs 20 crore.

MSEB offers standby power supply at the rate of Rs 600 per KVA to TE while in a separate deal for a similar arrangement with Enron the board pays Rs 1,000 per KVA. The officials argued that since they were paying more to Enron than what they charge to TEC, they should be paid without any difficulty.