Panel meet on Friday; to mull extending FRP deadline to June 30

Panel meet on Friday; to mull extending FRP deadline to June 30 New Delhi: An inter-ministerial panel will meet on Friday to mull extending the deadline for the government's ambitious debt recast scheme to June 30 for the beleaguered power distribution companies.

"The secretaries from all the ministries are meeting on April 5," Power Secretary P Uma Shankar told reporters on the sidelines of an event here.

When asked whether extending the date to June 30 for the Financial Restructuring Package be on the agenda, he said: "We will discuss it."

The last date for availing the scheme for the states was December 31, 2012, but so far eight states, including Bihar, Andhra Pradesh, Uttar Pradesh, Tamil Nadu, Kerala and Haryana, have come on board for the plan.

Under the scheme approved by the Cabinet Committee on Economic Affairs, 50 percent of the short-term outstanding liabilities would be taken over by state governments.

The remaining 50 percent loans would be restructured by providing moratorium on principal and best possible terms for repayments.

As part of mandatory condition, 50 percent of the outstanding liabilities up to March 31, 2012 is to be taken over by the state governments. This shall be first converted into bonds to be issued by discoms to participating lenders, duly backed by the state government's guarantee.

The support under the scheme will be available for all participating state-owned discoms on fulfilling short-term mandatory conditions.

The takeover of liability by state governments from discoms in the next two-five years by way of special securities and repayment and interest payment to be done by state governments till the date of takeover.

The accumulated losses of the state power distribution companies (Discoms) are estimated to be about Rs 1.9 lakh crore as on 31st March, 2011.

PTI