MSEDCL is in major financial trouble, with its arrears touching Rs73,897 crore . (FILE)
MSEDCL is in major financial trouble, with its arrears touching Rs73,897 crore . (FILE)

MSEDCL’s arrears touch Rs73,897 crore in Maharashtra

The Maharashtra State Electricity Distribution Company Limited (MSEDCL) – India’s largest power supply utility – is in major financial trouble as its pending arrears for non-payment of bills have ballooned to a whopping Rs73,897 crore
By Faisal Malik, Mumbai
PUBLISHED ON SEP 15, 2021 12:05 AM IST

The Maharashtra State Electricity Distribution Company Limited (MSEDCL) – India’s largest power supply utility – is in major financial trouble as its pending arrears for non-payment of bills have ballooned to a whopping 73,897 crore. Its liabilities till August, too, have increased to 45,440 crore.

To come out of the difficult situation, the state government has decided to appoint a consultancy firm, said Maharashtra energy minister Dr Nitin Raut. He also said that if the issue is not resolved, then the entire state may go into darkness.

The state energy department has sought a loan guarantee of 20,000 crore. It has also requested to provide another 12,000 crore against subsidy, schemes and dues pending for public water supply schemes, officials said.

Of the total pending amount, 14,046 crore has been increased in the past two years in the Uddhav Thackeray-led Maharashtra Vikas Aghadi (MVA) government, while and 36,609 crore was accumulated during the Devendra Fadnavis-led Bharatiya Janata Party (BJP) government from 2014 to 2019.

As the amount for non-payment of electricity bills is rising rapidly, the issue was discussed in the last state cabinet meeting held on September 8, when some of the ministers opposed disconnection of power supply of farmers for non-payment of power bills. The cabinet was told that if the amount was not recovered, it may lead to the question of survival of MSEDCL, which is fully owned by the state government.

On Tuesday, Thackeray called a review meeting to understand the matter in detail and deliberate upon the measures that will help revive the company. A presentation of MSEDCL was made before CM.

Deputy CM Ajit Pawar, water resources minister Jayant Patil, industries minister Subhash Desai, agriculture minister Dada Bhuse, public works department (PWD) minister Ashok Chavan, relief and rehabilitation minister Vijay Wadettiwar and animal husbandry minister Sunil Kedar were present in the meeting.

“CM said the solution to the problem is very important and it should be technical as well. The state may have to face blackout if the problem is not resolved. To study and suggest measures to overcome the issue, we will appoint a consultancy firm by calling an expression of interest (EOI),” said the energy minister.

“The state government had approved 20,000 crore as loan guarantee in the last fiscal year, which was yet to be implemented. CM was requested to allow the department to use that guarantee in this fiscal year as it will provide some liquidity,” said Dinesh Waghmare, principal secretary, energy department.

“We have requested to provide 12,000 crore as financial assistance. It comprises of 5,000 crore against subsidy given to farmers and dues pending for public water supply schemes,” said an official from energy department.

CM was of the view that they can come to a conclusion only after presentations by the Maharashtra State Power Generation Company Limited (MSPGCL) and Maharashtra State Electricity Transmission Company Limited (MSETCL) were made.

According to MSEDCL’s presentation, maximum arrear of 49,575 crore is pending from agriculture pumps. Despite that, the recovery rate from the farmers is minimum — 3.1%.

The energy minister also faced resentment from Maharashtra Vikas Aghadi (MVA) ministers during the meeting for disconnecting power connection of the farmers.

“The non-payment from farmers is a fact but wrong decisions by the energy cannot be overlooked. Why is it paying 3,000 crore as idle charges for not purchasing energy from the companies even after making an agreement with them? The agrarian community is very upset with the move and it has become difficult for us to face them ahead of the local bodies’ elections,” said a senior minister.

Dr Raut also blamed the erstwhile BJP-led government and stated that they left a huge amount as arrears against non-payment of power bills.

“Natural calamities such as floods, cyclones and Covid-19 made the situation even worse,” he told reporters outside the Sahyadri guest house in Malabar Hill.

In response, Fadnavis alleged that the state government wants to recover pending dues forcefully from farmers and hence, is blowing the issue out of proportion.

“The figures itself say how much arrears increased in the past two years [of MVA government]. Arrears such as cross subsidy for agriculture pumps and other losses can be adjusted from tariff rate. In my view, common people and farmers are in trouble owing to Covid-19. Instead of providing relief, a drama has been created for forceful recovery of pending arrears from them,” Fadnavis said.

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