More private firms in power supply will ease hurdles: Piyush Goyal

New Delhi: Increased participation by private companies in electricity distribution will help ease supply bottlenecks and reinstate investor confidence in the sector, Power Minister Piyush Goyal said on Monday.

The minister met top bankers including ICICI Bank Managing Director and Chief Executive Officer Chanda Kochhar and State Bank of India Chairperson Arundhati Bhattacharya and discussed hurdles affecting funding of power sector projects. "The bankers' concerns were fuel issues, power purchase and we also discussed the long-term road map for this sector which is viable and profitable," Goyal said after meeting the bankers on Monday.

"We have all resolved that we shall work as a team to bring about synergy and sort out the problems in the sector. We will look for more private participation in distribution and would require state support for this task," he said. At present, cities including Delhi, Mumbai, Kolkata, Surat and Ahmedabad, along with Odisha state, have privately owned power distribution companies.

"More private participation in power distribution means good technology, more capital and better management which will improve the efficiency of the distribution company," said Debasish Mishra, a Senior Director at Deloitte India. State electricity boards, which distribute power in most parts of the country have been struggling with finances following delays in tariff increases and subsidy payments.

The previous United Progressive Alliance government approved the restructuring of Rs 1.9 lakh crore of debt of state electricity boards in a move to turn around the near-bankrupt power distribution companies. Under the scheme, 50 per cent of the short-term outstanding liabilities would be taken over by the state governments and the remainder would be restructured by providing a moratorium on the principal and the best possible repayment terms. Goyal met representatives from as many as 24 banks and financial institutions including RBI, SBI, ICICI Bank, Canara Bank, Yes Bank and Punjab National Bank.