An anti-Uday track has emerged in the power sector. Three power gencos, Tata Power, Adani Power and Essar Power have mounted a sustained pressure for a 51 per cent buyout of their troubled coal assets by Gujarat Urja Vikas Nigam Ltd (GUVL), the apex body of the four discoms in Gujarat for a token amout of Rs 1. The gencos say they will retain the 49 pc, for which they will perform O&M and related support tasks. Now, if GUVNL were to accede to what is being asked of it, it would be loaded with big amounts of principal debt and interest servicing costs – Debt in excess of Rs 15,000 crore + Rs 1,600 of annual interest charges in case of Tata Power and Debt in excess of Rs 25,000 crore + Rs 3,000 annual interest charges in case of Adani. The 51 pc for Rs 1 is the gencos’ plan of getting away from downgrades by credit agencies, passing on its debt portfolio to the discoms. It is a liability offer.
How does this measure up with Uday principles and methods, for which states have signed up? What happens to discoms getting rid of existing morbidity and embracing health? The answer is simple. The 51 pc offer is a plan to make the healthy, sick and to make the consumers pay fatter bills. The gencos want the discoms to buy power at higher tariff so that the increases in costs of imported fuel are offset. In return, gencos will do support work and Tata Power has also offered that the validity of the PPA will be extended from the present 25 to 40 years during which GUVNL can access power generated beyond 80 pc at the plant.
It is reported that GUVNL is warm to the idea but only if it gets 100 pc for Rs 1. Plus it wants freedom to source coal from wherever it wants to run these plants, which are basically designed to run on imported coal with a different spec of calorific value and fly ash content. Usually, this becomes an issue, because recalibration of such a plant raises the spectre of high fixed costs, which then gets passed on to the consumers. The power minister has said that government will be the facilitator for all involved parties and also the protector of consumer interest. And it will see that power tariffs are not hiked through indirect route of discoms. Both can’t happen together.
