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Are the Stalled Power Projects Going to Impact the Future Electricity Tariff?

News

In a major hurdle to the National Democratic Alliance government's poll promise of 24x7 power for all, over 80 major projects - both generation and transmission - are facing delays. These projects have a stuck capital of Rs 3.75 lakh crore.

Source: Business Standard

SNP Insight

The cost overrun of the delayed power generation & transmission projects may force the power companies to pass this cost to the consumers to reduce their debt burden. This may increase the tariff of power in future, with DISCOMs unwillingness to buy even cheap power these companies may find it tough to sell the power in high cost. Also delayed transmission projects may add more stress on these generating companies to evacuate power. With cloud of uncertainty hovering over eighty power projects the financial institution will fill the pressure of Rs. 2.5 Lakh corer turn into NPA. So this may squeeze the investment to the sector.

Source: SNP Infra Research