SHILLONG: The government as yet gain come to the rescue of the Meghalaya Power Distribution Corporation Limited (MePDCL) and the Meghalaya Energy Corporation Limited (MeECL).
In a significant move to address long-standing power dues, the cabinet has approved the payment of Rs 565 crore to the National Thermal Power Corporation (NTPC) in 20 instalments. The decision came after extensive negotiations led by the state Power Minister, AT Mondal.
The rising power dues, which once amounted to Rs 665 crore, threatened to create a significant financial burden for the MePDCL and MeECL. This deal means that NTPC has agreed to waive off over Rs 100 crore, with the added possibility of a reduced interest rate.
“If allowed to continue, the dues would soon cross Rs 1,000 crore,” Mondal told the press. He further added, “After rounds of negotiations, NTPC agreed to settle for Rs 565 crore instead of the accrued Rs 664 or 665 crore.”
However, the financial health of MeECL remains precarious. “Given the circumstances, the state government has decided to take the responsibility of settling the Rs 565 crore with NTPC,” Mondal noted.
The power minister also highlighted the state’s commitment to ongoing negotiations with NTPC. “We’re still in discussions, and NTPC is open to further adjustments concerning the 20 instalments. We’re seeking more flexibility to ensure our instalment burden is eased,” Mondal stated.
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Notably, the government previously utilised the Atmanirbhar loan, managing to clear 50% of the power dues amounting to Rs 488 crore. “We initially paid Rs 244 crore. However, the remaining Rs 244 crore inflated to Rs 665 crore. Without intervention, these dues would continue to escalate, pushing us towards a financial crisis,” Mondal emphasized.
The root of these escalating dues can be traced back to an agreement the state government inked with NTPC in 2007. The agreement entailed fixed charges that the state found burdensome. Despite approaching NTPC for a reduction and even seeking legal redress, the state found no relief. “We pursued legal avenues, but the court upheld the 2007 agreement,” Mondal remarked.
As the state grapples with its power dues, this recent decision by the cabinet marks a significant step forward in settling its financial obligations while ensuring that the lights stay on in Meghalaya.
