Meghalaya govt to provide 100 per cent budgetary support to MeECL, scraps DF proposal
The decision was arrived at after a crucial cabinet meeting held here on Wednesday, wherein discussion pertaining to the crisis in the MeECL and the Power Department, Atmanirbhar loan, the pros and cons of DF were discussed.
The Meghalaya government has decided to provide 100 per cent budgetary support for the repayment of the Atmanirbhar loan taken by the Meghalaya Energy Corporation Limited (MeECL).
In addition to that, the two distribution circles will also not be handed over as a Distribution Franchisee (DF) and will be looked after by MeECL.
The decision was arrived at after a crucial cabinet meeting held here on Wednesday, wherein discussion pertaining to the crisis in the MeECL and the Power Department, Atmanirbhar loan, the pros and cons of DF were discussed.
Chief Minister Conrad Sangma said that the MeECL management has assured of working towards making time-bound reforms in MeECL in lieu of the budgetary support from the government side.
“The Cabinet today decided that we will give a chance to the MeECL and the Power Department with 100 per cent budgetary support for the Atmanirbhar loan, but the support of 100 per cent will come along with certain targets that need to be met in a time-bound manner," Sangma said.
He added that there has to be some kind of security in terms of mortgage of assets to the government of Meghalaya to ensure that there is some safety and security for the government also.
“Any payment or any support that is given, which will be a budgetary provision, will come out from the overall development budget of the state,” the CM added.
Sangma further informed that since the loan amount was huge, and to reduce the budgetary provisions on the finance department and the state government, it was earlier decided that a certain amount of the loan can be restructured in terms of Distribution Franchisee.
He maintained that DF is not something new, adding that a large number of DFs are in Garo Hills and some in Khasi and Jaintia Hills.
Speaking about the proposed reforms in MeECL, Sangma said that a lot of work needs to be done to improve the functioning of MeECL, adding that there are terminal benefits due since 2010 amounting to Rs 800 crore, overall tariff reforms and AT & C losses have to be improved.
The CM also stated that the 100 per cent budgetary provision will cost the state an annual amount of Rs 150-200 crore, depending on the year of the loan payment
Background
Giving details about the loan, Sangma said that the Atmanirbhar loan taken by the MeECL to pay the outstanding dues of all the power generating companies for the past 10 years has amounted to over Rs 1300 crore along with surcharges.
He added that the RECPDCL and the PFC have put conditions on the government of Meghalaya and the MeECL while disbursing these loans. The state has received the first tranche of the loan.
However, the RECPDCL, PFC and the Union Power department gave two options to the state before releasing the second tranche of the loan which amounted to Rs 600 crore.
The first option was that the state government has to give full budgetary support for the repayment of the loan along with interest which would amount to Rs 2000 crore in the next 10 years.
The second option was to give partial budgetary support along with certain restructuring within the MeECL which would be in the form of giving Distribution Franchisees to RECPDCL and PFC.
(Edited by Shankar Kumar Turha)
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