Home ECONOMY Private firms in power supply will ease bottlenecks: Goyal

Private firms in power supply will ease bottlenecks: Goyal


New Delhi, June 23 :

Increased participation by private companies in power distribution will help ease supply bottlenecks and reinstate investor confidence in the sector, Power Minister Piyush Goyal said Monday.

“We will look for more private participation in distribution and would require state support for this task,” Goyal told reporters here after meeting bankers to resolve issues between power sector borrowers and banks.

Piyush Goyal
Piyush Goyal

Goyal met representatives from 24 banks and financial institutions including RBI, SBI, ICICI Bank, Canara Bank, Yes Bank and Punjab National Bank.

“The bankers’ concerns were fuel issues, power purchase and we also discussed the long-term road map for this sector which is viable and profitable,” Goyal said.

“We have all resolved that we shall work as a team to bring about synergy and sort out the problems in the sector,” he added.

Goyal had announced that he would meet bankers, after last Friday’s meeting with the Association of Power Producers to discuss a range of power sector issues, ranging from generation, fuel supply problems to ease of doing business.

According to a Moody’s report, of all impaired loans at public-sector banks, 20 percent are of distribution companies (discoms), with the proportion going up to 48 percent at some of the most exposed banks.

The erstwhile UPA government had approved the restructuring of Rs.190,000 crore debt of state electricity boards in a move to turn around the finances of power distribution companies.

Under the scheme, 50 percent of the short-term outstanding liabilities would be taken over by the state governments and the remainder would be restructured by providing a moratorium on the principal and most favourable repayment terms.

Currently Delhi, Mumbai, Kolkata, Surat and Ahmedabad and the state of Odisha have privately owned discoms.