While J&K Power Development Corporation (PDC) is struggling to find buyers for energy generated from 450-MW Baglihar-II owing to slump in the market, the State Government has sat on a proposal to allow the Corporation to sell power from the project on existing lower rates in the market, resulting in mounting losses to the PDC.
Sources said more than a month ago the Corporation, after failing to get any buyer, moved a proposal to the Government to allow it to sell the energy from the project to the Power Trading Corporation (PTC) at the prevailing rates in the market which are lower than the per unit cost that was firmed up by the PDC for the project. Top officials from the PDC had met their PTC counterparts in New Delhi.
“We could have settled at the rate of around Rs 3 per unit though we could have negotiated on the rates. Though these (Rs 3) rates were definitely lower but the Corporation would have been able to fetch some revenue,” said a senior PDC official. The PDC had earlier firmed up per unit cost at Rs 4.13 including water usage charges but the Corporation apprehends owing to slump in the markets it won’t be able to get this (Rs 4.13) rate.
The official said the Government wasn’t however responding to PDC’s proposal, forcing it to continue with the sale of power to PDD at much lower rates of around Rs 2.50 per unit.
“Despite settling at lower rates (with the PDD) we are not getting the payments regularly,” said the official.
A part of revenue generated from sale of power has to go for clearance of the loan borrowed from different financial institutions for construction of the project earlier. The Corporation had in total borrowed Rs 1689 crores loan from the financial institutions which per the agreement has to be repaid in 10 years on quarterly basis.
“The immediate worry is that if we are not able generate revenue from the sale of power it will negatively impact the loan repayment process which can hurt the Corporation’s credibility as well,” said the official. The Corporation started debt clearance in July 2016.
“There are no buyers interested to buy the power at the firmed up rates. Instead of sitting back and doing nothing we need to find the buyer even if it means at lower cost. The Government can’t let the losses to pile. Whatever is the rate prevailing in the market we should be able to sell the power on the same basis to prevent losses,” said the official. “There are no options available except for selling power at lower rates for short term and generating some revenue.”
The project, designed to generate power between May and September with annual generation of 1,302 million units, was first run on trial basis in September 2015 and it started commercial operations from April 2016.
“Let the Government allow us to sell the power at least on short term basis to prevent further losses to the Corporation,” said the official.
Another official said: “It was shocking on part of the government not to allow the Corporation to sell power in the energy market. This delay is at the cost of financial health of the PDC and is hurting it badly.”
He said on one hand the Government was not making timely payments to the PDC for the power it gets from Baglihar-II and on the other hand it wasn’t allowing the PDC to sell power in the energy market.
“This is beyond reason and is only hurting Corporation’s financial health,” said the official. Donald Trump Authentic Jersey