State awaits CM’s nod to join UDAY scheme

After heated exchanges between central power officials and State Electricity Minister P Thangamani and TANGEDCO Chairman Dr M Saikumar over the last few months over TN delaying its decision, Union Power Minister Piyush Goyal recently announced that the state accepted in principle to join the scheme. 

However, now it is said Thangamani and Saikumar are awaiting the final go-ahead from the Chief Minister.

The state government decided to join UDAY in principle, after the Centre accepted its demand to consider the annual revision of power tariffs to the present quarterly system in the scheme. 

The Centre also expressed willingness to be flexible in implementing UDAY for the advantage of the state. Piyush Goyal said that UDAY would benefit Tamil Nadu to the tune of Rs 22,000 crore in the first three years and by Rs 7,000 crore annually after that.

Under the scheme, the state government should take over 75 per cent of TNEB’s distribution debt, which, sources reveal, amounts to around Rs 32, 655 crore. This in turn will ensure easier cash flow for the power major and easier availability of coal. Also, bonds proposed to be issued will have lesser interest than the rates with which TNEB is currently repaying its loans. 

However, the state has asked the period to take over the debt be extended from two years to 15 years, while the Centre is yet to respond on this demand. 

As per the scheme, the state is supposed to take over 75 per cent of TNEB’s debt on two terms — 50 per cent on 2016-17 and 25 per cent on 2017-18.