MSEDCL debt to increase by 14,000 crore next year

Mumbai : MSEDCL, which incurred a deficit of Rs 15,100 crore between April and October, is likely to have another Rs 14,000 crore loss next year. According to reliable sources, MSEDCL has expressed fears that the debt burden will increase further.

From April to October, about Rs 45,700 crore was spent from MSEDCL for purchase of electricity, salaries of employees, administrative expenses, maintenance and repayment of loans. So, recovery of electricity bills, subsidies and franchisees received Rs 30,600 crore. As a result, the deficit widened to Rs 15,000 crore. Last year, the average monthly deficit was Rs 428 crore.

Fixed size discount for three months

During the Corona period, industrial and commercial electricity consumption was low, while domestic electricity consumption was high. So the math of cross subsidy went wrong. Industrial and commercial customers had to be given a discount in a fixed size for three months. Consumers were being lured by concessions and bill waivers.

MSEDCL buys electricity from power generating companies to supply power to the consumers. MSEDCL has paid Rs 11,000 crore for that purchase. As a result, the situation of manufacturing companies is dire. The further increase in arrears during the Corona period led to a general confusion.

A mountain of debt of Rs 35,000 crore

To cover the April-October deficit, Rs 2,500 crore was raised by the Rural Electrification Corporation (REC), Rs 1,100 crore by nationalized banks and Rs 5,791 crore through cell side discounting. Total debt increased to Rs 34,939 crore by the end of October.

Out of the total (46,794 crore) arrears of MSEDCL till March, 2020, the arrears of domestic, industrial and commercial customers were 1,906 crore, while the arrears of agricultural pumps were 38,591 crore. During the April-September period, RCI customers paid Rs 21,000 crore out of Rs 27,160 crore.

Government that does not give concessions is insensitive – Hagade

If 50 percent concession is given to power consumers in the state, it will cost Rs 4,500 crore. If the government does not pay that much, then this government is insensitive. Also, the circular issued for the recovery of electricity bills is like giving a shock to two crore electricity consumers in the state, said electricity expert Pratap Hogade.

The lockdown started from March 22 in the state. The financial math of many went awry. Protests were staged on 13th July for waiver of electricity bills during lockdown. On August 10, we staged another agitation. Demanded 100 percent discount. At the same time, Kerala, Gujarat and Madhya Pradesh announced 50 per cent concessions. The third agitation took place on 27th October. “It is wrong to ask the Center for this concession,” Hogade said.