We have even offered to put all the funds we get into an escrow account. Let DERC pay various power suppliers after giving us money for salaries and interest payments,” says
Reliance Infrastructure CEO Lalit Jalan, in the context of NTPC being allowed to cut off power supply to R-Infra-owned Delhi discoms. In a conversation with FE, Jalan argues that DERC going back on its commitment to pay off — discharge, in jargon — all ‘regulatory assets’ quickly is what has made banks reluctant to lend to BSES. Since its current regulatory assets are R22,000 crore, each year of delay adds R3,000 crore by way of interest costs. Edited excerpts:
From June 1, how much of Delhi will go dark?
It is difficult to say since NTPC does not sign separate PPAs for each of its plants — if it did, we could have paid for power from some plants and not for the others. So how much gets cut depends on NTPC.
You could lose your licence if there are large power cuts...
We are allowed just a 1% level of load shedding.
Can you mobilise the resources to pay NTPC? The amount is just R788 crore.
The banks and PFC/REC (Power Finance Corporation and Rural Electrification Corporation) are unwilling to lend unless DERC commits to hiking tariffs fast enough to pay off our dues. We have also gone to the Delhi government asking it to, along with us, pledge its shares — 49% — in BSES to banks... The government is not willing to do this though our contract allows for such pledging of shares.
The same thing happened in 2011, why isn’t the Delhi government chipping in as it did then?
It helped that, in 2011, both the Centre and Delhi were under a Congress government. So the CM was able to get the central power minister to also intercede. NTPC accepted a letter of comfort from the Delhi government. The government and we brought in R1,000 crore and the banks, in turn, gave us R4,000 crore of loans... We have exhausted all of that now.
A letter of comfort means little. So what really convinced the banks?
What convinced them was the DERC tariff order of August 26, 2011, which said the regulatory assets — till then — would be made good by 2015. There was also the ATE (Appellate Tribunal for Electricity) order which said no fresh regulatory assets were to be created. So banks