States will invite bids for power to meet demand

New Delhi, Feb 5 (IANS) States will invite bids for procuring electricity to bridge the gap in demand and supply in the next six months, the government said Tuesday.

It is part of a package of measures power ministers of states and union territories resolved to adopt to improve the country's power situation after a meeting here with union Power Minister Jyotiraditya Scindia.

A power ministry statement said the states will now invite bids for procurement of power to meet the uncovered gap in demand and supply within the next six months through Case I bidding.

Case I is an open bid where the developer has to decide for fuel and location and compete against any other developer.

"State governments would prepare plans covering generation and transmission infrastructure for all time horizons and would procure about 90 percent power of their requirement under long-term or medium-term agreements," the statement said.

Earlier, briefing media persons on the progress of the financial restructuring programme (FRP) for distribution companies (discoms), Scindia said 5 out of seven "focus" states had agreed to take part in the scheme.

"Five states are already on board (the FRP). Their total short-term liability is close to Rs.120,000 crore. We are speaking to the finance ministry for the approvals so that in the near future, next week, we'll be able to take it forward," Scindia said.

Tamil Nadu, Andhra Pradesh, Rajasthan, Haryana and Uttar Pradesh are the states which have commited to the FRP.

In September last year, the Cabinet approved the restructuring package for discoms' debt burden, which stood at a staggering Rs. 246,000 crore at end of March 2012.

Under the scheme, 50 percent of the short-term outstanding liabilities would be taken over by state governments. The balance 50 percent loans would be restructured by providing moratorium on principal and best possible terms for repayments.

The 6th conference of power ministers of states and UTs deliberated several issues regarding providing affordable and adequate power to consumers and making electricity accessible to all, particularly in those areas that are not connected with the grid.

It was also decided that the state governments would ensure the accounts of the utilities, up to 2011-12, are audited and finalised by March 2013, and in future the accounts of a financial year are audited by September of the following financial year as per the Companies Act.

States would ensure that discoms file multi-year tariff petition and that State Electricity Regulatory Commissions (SERCs) announce multi-year tariff as per the National Tariff Policy.

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