Need DERC proof of assets to secure bank loans: Discoms

Rs 8,000 crore,most of it as loans from various banks. Given that our cash flow is severely restrained,no bank is willing to extend any kind of loan to us anymore,primarily because we cannot even demonstrate that we are likely to recover the amount at some stage,” a senior official of a discom said.

The discoms have asked the DERC to work out a provisional estimate about the gap in tariff.

“We understand that with the courts involved,the DERC cannot pass a provisional tariff order at this stage. So,we have appealed to the commission to at least acknowledge the fact that we are owed thousands of crores in regulatory assets,” the official added. “We can then tell the banks that we are owed this much,which we will get it at some point and will naturally be able to pay off our debts.”

According to estimates,regulatory assets owed to discoms stands at a little over Rs 8,000 crore.

Another official said during peak summer months,the problem is exacerbated by the payment cycles. “We are able to collect money from consumers only three months after power has been supplied — this is the nature of a billing cycle. Yet,we are expected to pay for the power we purchase from other sources on a weekly basis. Given that there is very little liquidity,it is almost impossible for us to arrange for adequate power unless we are given loans,” he said.

Discoms also highlighted that the price at which they purchase power is affected by the cost of the fuel source. “If the price of gas rises,the supplier is permitted to raise the price,but (we) in turn cannot pass on that increased cost to Delhi’s consumers. All of this has resulted in a business model that is getting very unsustainable,” the official said.

While the DERC is in the process of preparing a new tariff order,discoms believe it will not be ready before September — well after the peak summer months.

“If we are not able to get a loan,we will have to resort to rotational load-shedding. It’s not something we want to do,but there are very few options available to us presently,” the official added.