NEW DELHI, Mar 15: Jammu and Kashmir today became ninth state to join UDAY scheme for revival of power distribution companies and will save Rs 9,800 crore.
“Government of India and Jammu and Kashmir signed an MOU under the scheme UDAY – ‘Ujwal DISCOM Assurance Yojana’ today for operational and financial turnaround of the State’s power distribution department,” according to an official statement.
According to the statement, nine states have signed MoU under UDAY till date with the combined discom debt around Rs 1.94 lakh crore, to be restructured which is about 45 per cent of the total outstanding discom debt of Rs 4.3 lakh crore as on September 30, 2015.
Speaking on the occasion, Power Secretary P K Pujari said that with Jammu and Kashmir signing the MoU, we will be able to tackle 50 per cent of total discom debt in the country.
With time, more states are expected to join UDAY thereby, benefits reaching to more people across the nation, he said.
Jammu and Kashmir Power Secretary Dheeraj Gupta said: “We are committed to improve operation efficiencies through UDAY. The main aim for signing this MoU is to restructure high interest rate of total discom debt thereby improving financial condition of State discom.”
The MoU would enable the State to raise funds at cheaper rate to clear the outstanding dues of around Rs 3,538 crore of CPSUs, which would entail an annual saving of Rs 1,200 crore (over 4 years) towards interest cost to the State, he said while interacting with media.
Further, it paves way for improving operational efficiency of the Power Distribution Department of the State, he added.
Under the agreement, the reduction in AT&C losses and transmission losses to 15 per cent and 4 per cent, respectively, is likely to bring additional revenue of around Rs 7,150 crore during the period of turnaround.
State will also gain Rs 785 crore due to coal reforms.
Demand side interventions in UDAY such as usage of energy-efficient LED bulbs would help in reducing peak load, flatten load curve and thus help in reducing energy consumption in the State of Jammu and Kashmir. The gain is expected to be around Rs 590 crore.
An overall net benefit of approximately Rs 9,800 crore would accrue to the State by way of savings in interest cost, reduction in AT&C and transmission losses, interventions in energy efficiency, coal reforms etc during the period of turnaround.
The scheme would allow speedy availability of power to around 108 villages and 3.56 lakh households in the State that are still without electricity. (PTI)
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