NCLT receives insolvency plea against TN-owned discom TANGEDCO

A Tamil-Nadu based independent power producer has moved a petition against the state-owned distribution company (discom)- the Tamil Nadu Generation and Distribution Company Ltd (TANGEDCO) that has been under debt for several years now and has allegedly not made payments to various electricity producers in the state.

The  National Company Law Tribunal (NCLT) has been asked to step in to resolve the matter by initiating the corporate insolvency resolution process against TANGEDCO to recover receivables due to the producers.

According to the Chennai Bench of NCLT, Ind Bharat Power Gencom Ltd, Ind Bharat Thermal Power Ltd and Arkay Energy (Rameswaram) Ltd- all a part of the Ind-Bharath Power Infra Ltd- have filed the petition against TANGEDCO.

The matter came for hearing on Friday but the case was adjourned to a date after a week, according to sources.

The petition has been filed alleging that the discom has not paid dues of over Rs 600 crore to group companies that have been supplying electricity to TANGEDCO under various tenders since 2011. These companies have also sent a letter to the distribution company seeking payment of dues.

Arkay Energy claimed TANGEDCO owed around Rs 251.29 crore to the producer. There were petitions filed with the High Court earlier related to the non-payment of dues. According to industry sources, various power producers are suffering in the absence of timely payment on the part of the service provider.

Earlier in June, P Thangamani, minister for electricity, Prohibition and Excise, had said various steps taken by the government has helped in reducing TANGEDCO's debts to Rs 3,783 crore in 2016-17, from Rs 13, 985 crore in 2013-15.

Policy measures that have helped in this repsect are the UDAY Scheme. along with steps taken towards efficient coal management and import substitution. The gap between aggregate rate of realisation (ARR) and aggregate cost of supply (ACS) was reduced to Rs 0.44 in 2016-17, from Rs 2.16 in 2010-11. The year, the discom is expected to clock a profit of Rs 2,150 crore, as against losses incurred in the preceding years, added the minister while speaking at the state legislative assembly earlier.

"After a long gap of 15 years, it is expected that TANGEDCO will break even during the year 2017-18, which is on a fiscal year basis without considering the debt of around Rs 81,000 crore" he said.

The rating of Tangedco , which was C+ during FY215 has been rated as B for FY16 in the state distribution utilities annual integrated rating published by the Union Ministry of Power, owing to the financial turnaround of the discom. Moreover, the rating is expected to go up to A during this financial year, hangamani had said then.