Power engineers oppose Centre’s bailout terms
Tribune News Service

Patiala, November 1
The All India Power Engineers Federation (AIPEF) today said it would oppose the mandatory conditions imposed on the state government and power distribution companies (Discoms) if the state accepted the bailout package for the power sector, cleared by the Cabinet Committee on Economic Affairs (CCEA) last month.

Federation leaders said the financial restructuring plan was unlikely to improve the fiscal health of the Discoms.

The road map, prepared by CCEA, for the financial restructuring of the state power distribution companies, assures a grant of 25 per cent for restructured debt, provided the state Discoms manages to bring down their debt in the next five years. Chairman of the AIPEF Padamjit Singh said that the federation’s executive committee had discussed the proposed restructuring plan in detail.

Singh said, “The plan neither addresses the causes behind the fiscal woes of the power supply industry nor does it seek to remedy the ailment. The restructuring is aimed at securitisation of the huge losses faced by the Discoms and transfer them into bonds, which at a later stage could be sold in the international debt market. This would only result in the transfer of huge assets to private and multinational sector for a pittance.” Singh pointed out that the reasons behind the industry’s poor fiscal health were non-payment of subsidies, high distribution losses and high cost of power purchased. The CCEA had cleared the financial restructuring scheme with an objective to enable the state governments and Discoms to turn the fortunes of their power supply industries. The scheme, which is not mandatory for the states to adopt, will remain open till December 31, 2012.