Bengaluru: The government plans to allocate Rs 2,000 Crore to restructure and revive five sick electricity supply companies (ESCOM) in the state.
The country cabinet, which is scheduled to meet in Bellagavi next week to discuss anticonversion bills, is expected to provide proposal sanctions.
V Sunil Kumar, Minister of Energy, said the proposal was discussed with the Chairman of the Bakavaraj Bommai Minister and he had promised to add it to the cabinet meeting agenda.
Five electricity supply companies – Bescom (Bengaluru), Chescom (Chamundeshwari), Gescom (Gulbarga), Mescom (Mangaluru) and Hescom (Hubballi) – have been in red are largely due to rising contributions from the government.
They recently approached the bommai looking for the cleansing of contributions to the RS tone of 2,000 crore to ensure an unbroken power supply.
“If the government does not intervene, the ESCOM will struggle to survive and the efficiency of the power supply will change from bad to worse,” said a cabinet minister.
Energy Department official said the government would make payments in two parts – grants and guarantees for ESCOM to increase loans from the market.
“We see 60% infusion of capital to the company, with the government held a peg, and the rest as a grant once,” said an official.
Other officials said: “Because the government cannot pay contributions, it will provide a guarantee that there is no ESCOM that will default on their loan on the market.
It will also provide an opportunity to choose a cheaper loan.” If the step applies to the plan, It will be historical because the government will hold shares directly in ESCOM, which has been running independently until now.
The decision also came after the government could not repay the bill which was very delayed towards the ESCOM to provide free strength to farmers for their irrigation pumps.
There are 30,6 sets of lakh irrigation pumps that are supplied with free power.