Report of Indian Institute of Public Administration ... - Ministry of Power

State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
1.4.6 Taking Over of Liabilities by Government of Madhya Pradesh
The State Government took over outstanding power purchase and fuel liabilities of
MPSEB by issue of MSA bonds, REC loan restructuring and adjustment against free
electricity claims, PFC loan restructuring, LIC loan restructuring and part payment of
liability related to SLR bonds, etc. The liabilities to the tune of Rs 4,431 crore were
taken over by Government of MP. The details are shown below:
Liabilities of MPSEB Taken Over by Government of MP
(Rs crore)
2005-06 Amount)
Dues to Central Power Sector Undertakings (CPSUs) 2,663
Dues to Rural Electrification Limited (REC) 1,414
SLR bonds liabilities 354
Total 4,431
4.16
(Source: Government of MP schedule)
However, this additional liability of the State Government does not appear to be part
of the transfer scheme regarding assets and taking over of liabilities.
1.4.7 Inter-se Agreement
Inter-se agreements were executed on 17 June 2005 by MPSEB with the respective
power utilities in the State for the:
i) Power purchase agreement between MPSEB and MPPGCL;
ii) Transmission service agreement between MPSEB and MPPTCL and three
DISCOMs; and
iii) Bulk Supply agreement between MPSEB and all the three DISCOMs.
1.5 FINANCIAL RESTRUCTURING PLAN
In order to support and achieve the objective of power sector reforms , to attain
financial viability of power sector and to provide reliable and quality power supply to
consumers in the State, the Financial Restructuring Plan (FRP) has been formulated
on the recommendation of the Asian Development Bank (ADB). The FRP has not
been formally approved by the State Cabinet as yet. However, the State Government
has committed to the implementation of FRP.