Chennai: Tamil Nadu on Monday finally joined the Ujwal Discom Assurance Yojana (Uday) scheme which, according to the Union power ministry, would help the state save around '11,000 crore during the next three years.
At the MoU signing ceremony in New Delhi, Union power minister Piyush Goyal assured continued supply of domestic coal to Tamil Nadu while lavishing praise on late chief minister J. Jayalalithaa, who initially opposed the scheme but later came around and expressed her support.
With the addition of Tamil Nadu, the 21st state in the country to join the scheme, Uday has now covered almost 90 per cent of total utilities' debt of around Rs 4 lakh crore.
"Tamil Nadu would derive an overall net benefit of about Rs 11,000 crore through Uday, by way of savings in interest cost, reduction in AT&C and transmission losses, interventions in energy efficiency and coal reforms," a power ministry statement said.
By signing the MoU under Uday, the state is taking over 75 per cent of debt of Rs 30,420 crore of Tangedco. The scheme also provides for the balance debt to be re-priced or issued as state guaranteed Discom bonds, at coupon rates around 3-4 per cent less than the average existing interest rate.
The state would have savings of about Rs 950 crore in annual interest cost through reduction of debt and through reduced interest rates on the balance debt. Tamil Nadu and Tangedco have committed to bring ab-out operational efficiency.
After much deliberation, the Tamil Nadu Government decided to join the Uday scheme on October 21 when Jayalalithaa was at Apollo Hospital. During the October 21 meeting, the Centre agreed to do away with condition of the quarterly revision of power tariff, while the state government wanted the centre to relax FRBM norms for the entire bond tenure of 15 years. The Centre agreed to all the conditions except for relaxing FRBM norms.
