Maha power utility needs at least Rs 5,000 cr immediately to operate
With a total liability of R13,094 cr, Mahavitaran is on the verge of financial collapse.mumbai Updated: Sep 11, 2013 09:22 IST
With a total liability of Rs13,094 crore till August this year, the state-owned power distribution company Mahavitaran has painted a grim picture of its finances.
It said on Tuesday that it was on a brink of collapse mainly because of revenue deficit and uncollected dues from farmers.
The company expects the state regulator to allow it a tariff hike and recovery of dues from consumers.
It wants immediate respite of at least Rs 5,000 cr to do business in a proper manner.
Of the Rs13,094 crore, Mahavitaran needs to pay Rs 8,699 crore to buy power from generation (thermal, wind and co-generation) companies and transmission companies to carry power, and electricity duty to the state government, company officials told a media conference.
In addition to this, it needs to pay another Rs4,500 crore in other liabilities such as shortterm loan and overdrafts from banks.
Mahavitaran expected farmers to pay dues of Rs2,000 crore after the state Cabinet approved equated monthly instalments (EMIs) last week.
This amount is to be recovered till December this year.
Though total dues from farmers are more than Rs8,000 crore in the past 40 years, Mahavitaran has focused mainly on recovering dues from last year.
The company, however, is wellperched on one ground – on subsidy that the government pays for agricultural pumps.
“The government has been paying us subsidy — up to Rs3,500 crore annually — without fail. But we have not been able to pay the government the electricity duty,” said Mahavitaran executive director Abhijeet Deshpande.
Recently, the regulator allowed Mahavitaran to recover Rs5,000 crore from its consumers to pay the state generation and transmission companies.
These are the payments that the regulator had approved earlier, but had not decided the methodology of recovering them.
Mahavitaran said that this recovery would not help the company financially as all the money would go to other companies.