The Power Development Corporation (PDC) could plan developing power projects totaling 2700 MW if only the power development department would pay it the outstanding power bill of Rs 8500 crore.
This is not for first time that PDC had to wait to get its dues from the power department against the sale of power.
The state purchases electricity from more than a dozen sources, including the NHPC and other central powers suppliers besides state’s own PDC.
An official said the PDD promptly clears bills of central suppliers because they can snap electricity.
“But the PDC is always made to beg and suffer for its own money,” the official said. With Rs 8500 crore, another PDC official said, the corporation can plan projects up to 2700 MW costing Rs 27,000 crore.
The source said there are financial institutions like Power Finance Corporation (PFC) and Rural Electrical Corporation (REC) which have time and again shown willingness to fund execution of the projects in the form of loans up to 70 per cent of the project’s cost.
“We can pump these receivables from PDD in form of equity for execution of projects worth 2700 MW,” the official said.
In 2016, REC had agreed to fund 70 percent of total cost of 1856-MW Sawlakote project in the form of loan. It had also offered financial assistance for executing three more projects, 93-MW Ganderbal, 390-MW Kirthai-I and 930-MW Kirthai-II, reveals an official communication.
While construction cost of these four projects would require an investment of around Rs 33,000 crore, the debt component will be around Rs 22,000 crore on 70:30 debt-equity ratio.
Prior to it, the PFC had agreed in principle to provide loan assistance of Rs 12810 crore (70 percent cost of total project) to the PDC for developing Sawlakote.
“Both the offers didn’t materialise as the government didn’t respond to communication, Also, the equity was the problem,” said the source.
Another official said the outstanding of around Rs 8500 crore with the PDD has grown since 2011-12.
“The outstanding amount from March this year has been around Rs 200 crore to Rs 300 crore,” the official said.
Also, he said, the department never paid the 2 per cent monthly interest on the principal amount it was supposed to pay in case of delayed payments.
“Since the chief minister, power minister and bureaucrats form part of the PDC’s board of governors, the issue of interest is always shelved, but we charge interests to outside companies in case there is delay in payments,” said the official.
The PDC sells energy worth Rs 500 crore to Rs 550 crore through Power Trading Corporation annually.
“At times when we press for payment of surcharge interests we are reminded of plan funds the PDC are given by the government,” said the official.
The successive regimes have repeatedly made claims for developing hydropower projects totaling 5000 MW in the state sector. But these assurances have remained limited to papers only.
At present, J&K has 22 power projects owned by the PDC with capacity of 1211 MW. It imports more than 1500 MW from northern grid to meet energy requirements in the state. The long delay in execution of the projects, some of them conceived prior in the 80s, has doubled their cost.