The central government has decided to set up a high-level empowered committee headed by the cabinet secretary to resolve the issue of stressed thermal power assets.The other members of the committee are representatives from the Ministry of Railways, Ministry of Finance, Ministry of Power, Ministry of Coal and the lenders having major exposure to the power sector.
In the northern region, there is only one project Goindwal Saheb thermal of GVK Industries Limited in Punjab with outstanding debt of 3523 crores and equity of Rs 1250 crore. All other projects are in Chhatisgarh, Jharkhand, Madhya Pradesh, Maharashtra, Uttar Pradesh and Andhra Pradesh.
The committee will propose measures for revival of stressed assets so as to avoid such investments becoming NPA which are a cause of concern for the country. Besides this, the committee will also look into the various issues like how to maximise the efficiency of investment including changes required to be made in the fuel allocation policy, regulatory framework, mechanisms to facilitate sale of power, ensure timely payments, payment security mechanism, changes required in the provisioning norms and Insolvency and bankruptcy code.
There are 34 stressed power projects with the capacity 40,130 MW. These include projects with commissioned Capacity of 24,405 MW, under construction capacity 15,725 MW. The total outstanding debt against these projects is 1, 74.468 crores.
The standing committee on energy in its 37th. report has mentioned that though there is no single reason which can be assigned as a cause for making all these power plants stressed, but some major issues have been identified and categorised as non-availability of regular fuel supply arrangements, lack of power purchase agreement (PPA), Inability of the promoter to infuse the equity and working capital and regulatory and contractual issues.
The Standing Committee has recommended that an appropriate task force be constituted to specifically look into the problems of the independent power producers (IPPs) with a view to bring them out of NPAs and stressed asset mire so that the power generation in the country is given a fillip. Further, the Committee recommends that the process of grant of a loan, supervisory mechanism, and its subsequent monitoring should be given a relook to make it more realistic and productive. The RBI should advise all commercial banks to follow the credit rating system proposed by the Government for assessing the credit risk of infrastructure companies.