Damodar Valley Corporation (DVC) forced by payment defaults to the tune of Rs 6400 crore by the Jharkhand State Electricity Board (JSEB) is considering shutting down part of its 5,700 MW thermal power generation capacities next month.

According to news report in Business Line the dues which mounted over the years amount to nearly 60 per cent of DVC’s annual earnings. According official sources JSEB had evaded payment of dues for the last one decade.

“As on date we have a principal (bill) outstanding of nearly Rs 4,000 crore. As per the power purchase agreement (between DVC and JSEB) as well as the tripartite agreement during debt-securitisation in 2001, JSEB is now supposed to pay Rs 2,400 crore delayed payment surcharge (15 per cent a quarter) on the principal outstanding,” he was quoted saying.

The short term loan of Rs 1300 crore raised by DVC this fiscal to was inadequate to meet the entire operating expenses. Owing to its cash shortage DVC defaulted in paying nearly Rs 1,000 crore coal dues.
The power utility is now anticipating rationing of fuel supplies by Coal India, fuelling mob fury against an imminent blackout.