Reliance Infra ready infuse an equity of Rs 520 crore: Discoms

NEW DELHI: The discoms BSES Yamuna and Rajdhani on Thursday came out with a fresh set of proposals saying that parent company Reliance Infra was ready infuse an equity of Rs 520 crore in the company.
In a continuation of the drama unfolding with power suppliers BSES Yamuna and Rajdhani declaring insufficient funds to pay generators, the discoms came out with a fresh proposal on Thursday saying that parent company Reliance Infra was ready infuse an equity of Rs 520 crores in the company.
The government has sought time from Delhi Electricity Regulatory Commission (DERC) till January 27 to decide whether they want to match this according to their shareholding (49%) in the company.
The state government had made it clear to DERC that they were not prepared to give any loan to the BSES companies, but now has to take a decision on whether they were willing to invest Rs 500 crore to maintain their 49% shareholding value in the BSES companies.
The two discoms together have to raise Rs 1,020 crore to enable them to get a loan of Rs 5,100 crore, which they desperately need to pay generation companies like NTPC that has threatened to stop power supply from January 7 if their outstanding dues are not cleared.
Though the modality of the funding may change from loans to equity infusion, experts maintain that this is still a bailout for the mismanaged companies who have been unable to stay financially afloat and defaulted on several payments.
Earlier, the government had intervened on their behalf by asking NTPC to give the BSES companies a months time to pay their dues and later DERC intervened by asking the state government to re-think their decision to financially assist the debt-hit power companies.
"The discoms informed the government only on Thursday that Reliance Infra was ready to infuse Rs 520 crores equity in the joint-venture companies. Now, it is the government's call whether they want to invest equally in the companies to maintain their 49% shares or dilute the shares by bringing in a third party,'' said sources.
The government is reluctant to lose out on their shares in the company and become lesser partners.
"We do not want to become lesser partners in the companies so the BSES proposals will be considered. If we do not match their equity infusion, Reliance Infra's shares will increase in the company. This is an investment and cannot be taken out and the government will take a call what is best for consumers,'' said sources in the government.
Experts, meanwhile, say that the government investing Rs 500 crore which comes from the public exchequer may have huge political implications.
"It is nothing but a bailout for poorly managed companies. First the tariff went up, and now people of Delhi may have to shell out another Rs 500 crore as investment in these companies to keep them afloat. When there is so much public unrest over the performance of the discoms, any decision to bail them out either by loans or equity infusion may go against the government,'' said a power sector expert.
Ironically, north Delhi discom Tata Delhi Power has paid the government healthy dividends on a more regular basis while the in comparison, the BSES companies have barely managed to match up.
"Tata Delhi Power has had profits so they were able to pay good dividends to the government, which is 49% owner in the joint-venture. The BSES companies have not been able to pay as well. So its unlikely that the government will get much in return by dividends by investing another Rs 500 crores in the BSES companies,'' said a source.