Chennai: Tamil Nadu government has agreed in principle to join the Ujwal Discom Assurance Yojana (UDAY) meant for achieving financial turnaround of power distribution companies. The Centre conceded all the demands made by the state except the relaxation of FRBM norms. “I am happy to share with you Tamil Nadu has in-principle indicated that it would like to join Uday and the broad parameters had been worked out,” Power Minister Piyush Goyal told reporters after holding discussions with state power minister P. Thangamani-led team of officials in New Delhi on Friday.
The minister said that state minister along with the officials would be coming again to Delhi for finalising about UDAY. He said that the final decision on signing UDAY would be taken by the state cabinet as per the instructions and suggestions made by Chief Minister.
According to informed sources, the Centre has agreed to do away with the condition of quarterly revision of power tariff. The state government wants the Centre to relax FRBM norms for the entire bond tenure of 15 years, state should be authorised to float 15-year bonds with 5-year moratorium and commercial banks should provide 50 per cent cash loss financing for the next 5 years as some cash losses of the DISCOMs will persist during the initial period. Sources say the Centre has agreed to all the conditions except for relaxing FRBM norms.
After criticising the state government in run up to the May 2016 Assembly elections for not joining UDAY, Mr Goyal met CM Jayalalithaa in connection with the debt restructuring scheme. Following the meeting, Jayalalithaa set up a high level team headed by power minister to hold talks with the Centre on the scheme. By joining the scheme, the state will have to bear 75 per cent of the debt of Tangedco as on September 30, 2015. Since the scheme pertains to distribution companies, the debt component for distribution comes to Rs 43,540 crore out of Rs 81,782 crore. The state government’s commitment will be Rs 32,655 crore. The overall debt of the Tangedco includes Rs 6,223 crore from the state government.
