The importance of the flow of capital into the power and housing sectors in India cannot be overemphasised. Recent developments in both sectors once again bring to the fore the critical issues of effective payment mechanisms and price transparency as vital factors to boost the economy.
As much as ₹3 trillion of investment in a dozen private power plants is at risk of turning into NPA as state discoms buying power have not been making payment for months, official data and sources said.
India for the first time may allow electricity generation companies to call bids from state distribution companies to sell power. The move is aimed at introducing market-based price discovery for electricity and curbing nontransparent bilateral ties between states and power plants that are not recognised under the Electricity Act
Peak power demand in Delhi this summer is expected to breach the 7,400 MW-mark and the two BSES distribution companies (discoms) in the capital have taken measures like long-term power purchase agreements (PPAs) and banking arrangements with various states, the BSES said on Friday.
Inadequate revision of rates alongwith delay in filing tariff petitions are likely to remain an area of concern in the financial year 2020 for distribution companies (Discoms), says a report.
The Cabinet Committee on Economic Affairs said late payment surcharge will be made mandatory for power distribution companies. This is in line with the recommendations of a Group of Ministers (GoM) on issues relating to stressed thermal power projects.
In a meeting of the power producers last week, the key issues discussed were the nonpayment by discoms as well as the coal shortage. CNBC-TV18 spoke with Ashok Khurana, director-general of Association of Power Producer
Also, higher costs, execution challenges, cancellation of tenders due to unrealistic tariff expectations by discoms made matters worse, Bridge To India said in a report.
Shortage of coal at power plants, inadequate tariff hikes and rising operational costs after the 7th Pay Commission have been putting additional pressure on already hard-pressed electricity distribution companies (discoms).
The government has constituted a committee under the Central Electricity Authority (CEA) to explore prepaid payments by state electricity distribution companies to power plants, a government official said.