Highlights of Power Distribution Companies Debt Restructure Plan

New Delhi, Nov 5 (IANS) The government on Thursday approved a mega financial revival plan for the power distribution companies involving states, banks, electricity generation firms and Coal India.

The salient features of the mega revival plan -- Ujwal Discom Assurance Yojna (Uday) which will help power distribution companies restructure outstanding debt of Rs.4.30 lakh crore are:-

-- States to take over 75 percent of Discoms debt by 2016-17.

-- Remaining debt to be converted into loans with marginal interest rate

-- Debt not be included as fiscal deficit of state governments

-- States to issue open market bonds to banks holding the debt

-- States shall take over the future losses of Discoms

-- States accepting Uday to be given priority funding

-- States accepting Uday to be supplied with additional coal at notified prices

-- Rs.4.30 lakh crore debt to be restructured through Uday

-- Banks advised not to give further loans to loss-making discoms

-- Discoms to comply with the renewable purchase obligation (RPO)

-- Uday to allow Discoms to break even in the next 2-3 years

-- Strict monitoring mechanism set up for Uday

-- Uday to improve operational efficiencies of Discoms

-- Reduce cost of power

-- Uday to see increased supply of cheaper domestic coal

-- Coal linkage rationalisation and liberal coal swaps

-- Supply of washed and crushed coal

-- Faster completion of transmission lines

-- Uday described as major step for providing 24X7 power for all