Bhubaneswar: The Odisha government has made a significant decision regarding the liabilities of the state’s DISCOMs (Distribution Companies) after they were vested with Tata Power Company Ltd. (TPCL).
Following the transfer of assets created under various government-funded schemes to the newly formed TP-DISCOMs, the corresponding liabilities, including CAPEX loan, IBRD Loan, APDRP Loan, and R-APDRP Loan, along with their interests, remained with the Residual Utilities/DISCOMs.
However, these Residual Utilities/DISCOMs have no revenue stream to settle these liabilities, resulting in the accumulation of interest costs amounting to Rs. 3,420.55 crore till March 31, 2023. Given the inability of these utilities to serve the interest, the government has decided to convert the outstanding loans to zero percent interest-bearing loans, effective April 1, 2023.
Additionally, the interest outstanding up to March 31, 2023, amounting to Rs. 3,420.55 crore, will be capitalized. This decision aims to provide relief to the Residual Utilities/DISCOMs, which would otherwise face difficulties in managing their liabilities. The conversion of government loans to zero percent interest-bearing loans is considered rational, as it would help avoid potential tax implications arising from the conversion of project-specific loans to grants.
