Meghalaya: MeECL financial mess raised in Assembly yet again



Meghalaya Power Minister James PK Sangma said that the increase in liabilities of the Meghalaya Energy Corporation Limited (MeECL) by 21 per cent in 2019-20 and the drop in revenue in 2018-19 and 2019-20 was due to low billing efficiency, transmission and distribution losses besides other reasons.

“There are many reasons. This drop is not something that is happening now. They have been taking place in the past also. One of the reasons is that the billing efficiency is very low. It stood at 62 per cent some years back, and we brought it up to 72, 73 per cent as of now. There have been ups and downs and, revenue has seen a drop once in a while,” Sangma said.

Replying to a supplementary question raised by Congress legislator from Umroi, George B Lyngdoh, Sangma said transmission and distribution losses are there because of weak distribution network.

“The distribution network at present needs strengthening and, for that, the Government of India has provided an ADB (Asian Development Bank) funded project where we are setting up more sub-stations. It will strengthen our network,” he informed.

He said that since the commercial losses are very high, the government is bringing up smart meters. “We believe that with the implementation of smart meters, we will be able to bring down the commercial losses because billing efficiency will improve exponentially,” Sangma added.

He informed that the Government of India has started the whole process of converting all static meters to smart meters. "This is a huge exercise which the Ministry of Power, Government of India has communicated with us that they will, throughout the country, convert static to smart meters. We have taken the first step,” he added.


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Earlier, replying to a starred question raised by Congress MLA from Rangsakona, Zenith Sangma, the Power Minister informed that the total amount of loan sanctioned by Government of India under Atma Nirbhar to MeECL/MePDCL (Meghalaya Power Distribution Corporation Limited) is Rs 678.86 crore (REC Limited) and Rs 672.86 crore (Power Finance Corporation Limited), which comes to a total of Rs 1345.72 crore.

The total amount of loan availed by MeECL/MePDCL is Rs 193.43 crore (REC Limited) and Rs 193.43 crore (Power Finance Corporation Limited), which comes to a total of Rs 386.86 crore; while the rate of interest to be paid by MeECL is 9.5 per cent.

“For loan amount availed for Rs 193.43 crore each from REC Limited and Power Finance Corporation Limited, the average monthly requirement for payment of interest is Rs 1.53 crore each for REC Limited and Power Finance Corporation Limited. And the total average monthly requirement is Rs 3.06 crore,” Sangma said.

To a question raised by Zenith on the total amount of interest rate to be paid monthly, Sangma said, for availing the total amount of Rs 1345.72 crore, the interest rate will come to Rs 10.65 crore monthly.

Zenith further asked whether it is advisable to avail this loan, keeping in mind the fiscal health of MeECL. “When the debts or repayment amount is more than the revenue generated, MeECL will not be in a position to sustain on its own,” the Congress MLA said.

Admitting that the MeECL has lots of debts, the Power Minister, however, said that the government is trying to make a turn-around. "This is a gradual process and, it will take time," he added.


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“The opportunity arose when the Government of India came up with the Atma Nirbhar loan for Discoms facing distress and, the rate of interest offered along with the period of moratorium (two-year period) was attractive."

"Therefore, rather than letting this sort of liabilities continue, we decided to avail this loan at a low rate of interest of 9.5 per cent because this is one-time assistance and a good scheme,” Sangma said, adding that MeECL's burden will not be passed on to consumers.

Hitting out at the Congress, Sangma said that the present government had inherited this mess and, the solution to this "long-drawn-out problem" will not come immediately.

He said that there are many checks and balances that the government is trying to put in place -- some short-term and medium-term to reduce AT & C (Aggregate Technical & Commercial) and transmission-distribution losses and to improve billing efficiency and some long-term to increase generation.

“We understand that taking a loan to clear all these outstanding debts does put additional burden on MeECL but, the call had to be taken and, this was a great opportunity to avail such kind of a loan which was a soft loan in nature,” he added.

To a question whether the cumulative burden will turn the company into a Non-Performing Asset (NPA) compelling the government to resort to the privatisation of the same, the Power Minister said, “With the kind of legacy problem that we inherited, MeECL was heading in that direction of becoming an NPA. But we are trying to ensure that there is a turn-around by putting in place all these measures.”

(Edited by Ibankyntiew Mawrie)


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