Hyderabad: The state government has approved the formation of a new distribution company to reduce pressure on existing DISCOMs. Heavy loans and large arrears have constrained operations in recent years. These issues also led to higher borrowing costs. The decision aims to restore sector stability. Officials expect the move to improve performance across utilities.
Rising liabilities have affected the rankings of the two DISCOMs. Their national position declined due to financial stress. Furthermore, lenders raised interest rates, making operations more difficult. The government reviewed several options before choosing structural reorganisation. It now plans a shift of major dues.
Restructuring plan transfers key obligations to the New DISCOM
The New DISCOM will inherit ₹9,032 crore from the existing ₹62,897-crore debt. It will also take ₹26,950 crore in pending power-purchase dues. This reallocation is expected to reduce the load on the older companies. It may also make future borrowing easier.
Agricultural borewells, lift-irrigation schemes, drinking-water systems, Mission Bhagiratha and Hyderabad Metro Water Works will be placed under the new entity. These connections consumed 1,38,459 million units between 2020 and 2025. The government pays all these bills directly. It will now send the funds to the new organisation.
Free power for 28.90 lakh agricultural borewells will also fall under the New DISCOM. The state is providing ₹11,000 crore this year to the existing DISCOMs for this commitment. Once the new entity begins operations, the subsidy will be allocated entirely to it.
The company will appoint a CMD, directors and a staff of 2,000 members through deputation. The team will consist of engineering, maintenance and administrative units. Officials expect a smoother operational framework.
