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Gridco sat on Rs 3, 372 cr dues of Odisha discoms, took loans to pay power bills !

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Reported by Chinmaya Dehury
Bhubaneswar, June 24:

The CAG has come down heavily on Gridco, the bulk power supplier to the power distribution utilities (Discoms) in Odisha, for non-realisation of outstanding dues amounting to Rs 3,372.29 crore from the discoms forcing it to borrow Rs 4,505.22 crore to pay the power generators in the state.

“Current assets, Loans and Advances as on 31 March 2013 included Rs 3,372.29 crore, which was lying unrealised from discoms towards cost of power sold despite an escrow mechanism being available to recover such dues. Due to non-realisation of dues from them leading to its inability in meeting power procurement cost, the company resorted to borrowings from Financial Institutions from time to time, which accumulated to Rs 2,445.56 crore as on 31 March 2013,” said the CAG in its report.

Gridco LogoThe net worth of Gridco, the state PSU, turned negative from 2010-11 and stood at Rs 1,163.95 crore in 2012-13 due to losses during 2009-12. The company was incurring losses due to its failure to increase its revenue. Odisha Electricity Regulatory Commission (OERC), while approving the ARRs, advised the company to meet the gap by increasing its revenue from power trading besides sales to discoms.

The state owned company incurred losses during five years 2008-13 except for 2008-09 and 2012-13. However, loss of Rs 936.81 crore in 2011-12 turned to profit of Rs 31.79 crore in 2012-13 primarily due to the waiver of dues payable to the government worth Rs 306.37 crore in October 2013. The dues payable to government (Rs 443.71 crore) was shown as revenue for the year with adjustment against dues receivable from government (Rs 137.34 crore).

It also observed that the company could not earn Rs 498.18 crore through power trading during 2008-13 as against the revenue gap of Rs 5,914.43 crore left by OERC in the tariff orders. Shortfall was partly attributed to delay in decision making and absence of required policy framework.