New NPA norms not workable, says Power Minister RK Singh
In an interview to CNBC-TV18, Union Power Minister RK Singh, spoke about stressed projects in power sector and also about the Reserve Bank of India's (RBI) February 12 circular on one-day default rule.
There is a lot of stress in the power sector. Over 27 projects of thermal power assets and over 16,000 megawatt in the gas sector and a lot of assets in the hydro sector are part of the stressed assets. Government is pushing for 30 days for one year before these assets go for NCLT. So, what are you doing as you are in the power ministry?
RBI circular is not workable. If you follow that circular large number of additional assets will go into the red, they will also become sick. This is like somebody who has just started sneezing and you are driving him sick. This circular needs to be changed. So, I am calling a meeting of the Ministry of Finance, Department of Banking and RBI to discuss this.
If somebody's payment gets delayed or if somebody gets a delayed payment from discoms or his payment or installment gets delayed by a day, under this circular, they will have to start a resolution process, which is nonsensical. If somebody's asset goes into this resolution process, then it is expected to be completed in 180 days, it is just impossible. A resolution process will take at least a year for it to be a real resolution process. So, that limit is also unworkable.
Our view is, if there is default of 30 days or more, then start the resolution process. If the resolution process starts, then give a time of at least a year for it to be successful. In six months, you can't expect a resolution process to be successful. So, this circular is impractical, this needs to be changed.
Since you mentioned that discom pay at a very late time to the companies and that would be a problem, then why the whole system of payment and quarterly submission of data is not there. Now, Ujwal DISCOM Assurance Yojana (UDAY) data authenticity is being questioned and a lot of articles have come that data provided by PFC and the data provided by the states are a mismatch?
Two things you asked, first why are the payments not being monitored? As far as the provisions are concerned, there is provision in the power purchase agreement (PPA) that the payments have to be made within 30 days. If they are not made within that period, then there will be penal interest etc which is paid. It doesn't happen in practice because discoms are in possession of power. So far as the PSUs are concerned, they are better off but the IPPs they have a problem, they can't fight with a discoms because the power is with the discoms.
Second, you mentioned about the data of UDAY, I don't know who told you that the data is not correct. The data is very correct. We have data based on audited figures and we go by that. The problem is that the audits happen late. The audit is supposed to happen only once a year because discoms are not listed, so they are not audited quarterly. In many cases auditor also delay it. So the figures come late but when the figures come they are absolutely audited. So, there is no question of the figures being wrong.
There is also some impression somewhere that losses are not coming down. The losses are coming down. So the data is audited and we go by audited data and the second is that the losses are coming down.
First Published: Apr 19, 2018 6:21 PM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Stampede-like situation disrupts Rahul Gandhi, Akhilesh Yadav's joint rally in Uttar Pradesh
May 19, 2024 4:26 PM
Ladakh Lok Sabha election: With Independent candidate's entry, it's now a 3-way contest for BJP and Congress
May 19, 2024 4:01 PM