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MSEB to be hit hard by Rs 8 billion state subsidy denial

BS Regional Bureau

The Maharashtra government's decision of not releasing Rs 8 billion subsidy before this fiscal year will further cripple the financial health of the loss-making Maharashtra State Electricity Board (MSEB) which has incurred a loss of Rs 16 billion in 2000-01.

Sources said that MSEB in its tariff revision proposal filed before Maharashtra Electricity Regulatory Commission (MERC) stated that the MSEB is having a loss of Rs 16 billion in 2000-2001. Revenue of MSEB, as per the tariff fixed by MERC for 2000-2001, was estimated at Rs 114.84 billion.

On the other hand, MSEB had to pay Rs 5 billiion more than expected for purchasing power from other utilities. Out of this, Rs 4 billion has been paid to the central power utility National Thermal Power Corporation (NTPC) alone, sources said.

The senior officials of MSEB are discussing how to cope up with this financial crisis imposed by the state government due to its refusal to release Rs 8 billion for MSEB for supplying subsidised electricity towards agricultural and the powerloom subsidy.

The state energy minister Padamsinh Patil had promised on the floor of the state Assembly during the Nagpur session last year, that the state government would provide Rs 8 billion to the MSEB for supplying subsidised electricity to the farmers and powerloom sectors.

However, in the affidavit dated March 19 filed before MERC, the state government claimed that the subsidy amount is Rs 7.49 billion for giving 33 per cent concession in electricity bill for the small and marginal farmers.

The affidavit filed by the government has many loose ends. The government is not certain that it can release the amount even by October 31. "The amount of subsidy will be released thereafter or before the accounts of the MSEB are finalised by October 31 barring any unforeseen contingencies," the affidavit said.

The affidavit has further stated that the total amount due to the government is around Rs 10.26 billion which is more than the amount demanded by MSEB for loss of liquidity.

However, the Enron Virodhi Manch (EVM) convenor Pradyumna Kaul said on Thursday that the amount released by the government towards the subsidy for the agricultural and powerloom sector should not be diverted for paying Enron's electricity bills.

The government has released Rs 735 million as a loan for MSEB to pay Enron's November 2000 bill. He said that any amount released by the state government as a loan to the MSEB should not be adjusted against the subsidy amount provided by the government to MSEB for the agricultural and powerloom sector.

He said that the subsidy amount should not go for paying the bills of the costly electricity from Enron. It is against the MERC order and the Electricity Regulatory Commission (ERC) Act, 1998. "EVM will challenge this violation of law," he said.

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