Union Government and Jammu & Kashmir Government signed a Memorandum of Understanding (MoU) under the Scheme Ujwal DISCOM Assurance Yojana (UDAY) on 15 March 2016 for operational and financial turnaround of the State’s Power Distribution Department.
With this, J&K became the ninth state to sign MoU with the combined DISCOM debt around 1.94 lakh crore rupees. The main aim for signing the MoU is to restructure high interest rate of the total discom debt thereby improving financial condition of State Discom
An overall net benefit of approximately 9800 crore rupees would accrue to the State by opting to participate in UDAY, by way of savings in interest cost, reduction in Aggregate Technical and Commercial (AT & C)and transmission losses, interventions in energy efficiency, coal reforms etc. during the period of turnaround.
Features of the MoU
• It will enable Jammu & Kashmir to raise funds at cheaper rate to clear the outstanding dues of around 3538 crore rupees of Community and Public Sector Union (CPSUs), which would entail an annual saving of 1200 crore rupees over 4 years towards interest cost to the State.
• Compulsory Distribution Transformer metering, consumer indexing & GIS mapping of losses, upgrade/change transformers, meters etc., smart metering of high-end consumers, feeder audit etc would improve the operational efficiency of the Power Distribution Department of the State.
• AT & C Losses and transmission losses would be brought down, besides eliminating the gap between cost of supply of power and realisation.
• Union government would also provide incentives to the DISCOMs and the State Government for improving Power infrastructure in the State and for further lowering the cost of power.
• The State shall also be supported through additional coal at notified prices and in case of availability through higher capacity utilization, low cost power from NTPC and other CPSUs.
• Other benefits such as coal swapping, coal rationalization, correction in coal grade slippage, availability of 100 percent washed coal would help the state to further reduce the cost of Power. The State would gain around 785 crore rupees due to these coal reforms.
Benefits for the People of Jammu & Kashmir
• Cost per unit of electricity will be reduced for the consumers.
• The scheme would allow speedy availability of power to around 108 villages and 3.56 lakh households in the State that are still without electricity.
• Availability of 24x7 power to hitherto unconnected villages/households etc. would boost the economy, promote tourism and industries, thereby improving employment opportunities for the people of the State.
The Scheme UDAY was launched by the Union government on 20 November 2015 to ensure a sustainable solution to enable the distribution utilities across the country to break out of a long standing debt of almost 4.3 Lakh crore rupees.
Sustainability of operational and financial performance is at the CORE of UDAY.
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