Delhi power distributors seek Rs500cr bailout
05 May 2011
The Reliance ADAG-backed BSES, which runs Delhi's two power distribution companies, has sought a bailout of Rs500 crore, saying it has cash enough to last barely a month.
"We are struggling to stay afloat. We should be given some cost benefits otherwise we will bleed to death," chief executive officer and director Lalit Jalan said on in New Delhi on Wednesday.
Subsidiaries BSES Rajdhani and BSES Yamuna, which distribute power to 70 per cent of the capital's population, have accumulated losses of Rs7,000 crore, and lose Rs8-9 crore daily because of "inadequate" tariffs, Jalan said.
''Everybody, from the government to the ministry of power to the Planning Commission, is aware of this. If nothing is done to sort out this issue by the end of May, we will begin defaulting on payments to the National Thermal Power Corporation (NTPC) and other sources from whom we purchase power,'' he said.
Jalan was referring to the long-standing debate between the Delhi Electricity Regulatory Commission (DERC) and Delhi's distributors over power tariff hike in the capital. The distributors say a tariff hike is absolutely essential, but it is considered unlikely that the DERC will announce an order on the subject before July or August.
A tariff hike of at least Rs2 per unit in Delhi was indispensable, Jalan said, adding that while the cost of power had increased by 200 per cent over past eight years, retail tariffs had increased by just 15 per cent. Power tariffs were last revised in 2005.
