EB banks on turn around

CHENNAI: Driven by a fresh energy due to the proposed hike in the electricity tariff, the Tamil Nadu Generation and Distribution Corporation (TANGEDCO) on Sunday convened a meeting of top bankers to apprise them of their plans to make a turn around so that the lenders would be inspired to infuse money into the EB’s dry coffers.Following a blanket RBI directive in respect of institutions in poor financial health, the bankers did not come forward to lend money to the TNEB. In July, the power corporation was downgraded to Default (D) category on a 20-point scale which meant significant risk to lenders. This spelt more trouble to the power board, which scared lenders.Now, it hopes that it would be able to mop up `9,000 crore more as revenue from revised tariff plan after its petition is cleared by the electricity regulatory authority.  The State government is likely to pitch in with ` 2,000 crore as equity share capital assistance. By cutting down on power purchase in the open market and naptha-based plants which roughly cost anywhere between `5 and `10 a unit, the EB hopes to save around `2,000 crore a month. The power body is confident that the coal-based projects would start production soon and help minimize power purchase.Also, by making concerted efforts to halt power theft and by improving efficiency in procurement and assessment processes, the TANGEDCO hopes to save `1,000 crore annually. Measures like these, the power body hopes, would bring in `14,000 crore annually by 2012-13 which would help it make a real turnaround.The TANGEDCO would unveil this plan of theirs to 21 lenders including the State Bank of India and Bank of Baroda on Monday so that the banks support it in its effort to get out of the red.