Guwahati: The Ministry of Power is working on a plan to help Distribution Companies (Discoms) that are unable to pay their bills.

The failure of Discoms to pay dues has an influence on the whole value chain of the electricity sector.

According to a statement released by the union power ministry, delays in payments by a Discom to a generating business have a negative impact on the cash flow of the generating company, which must make arrangements for input supplies such as coal and maintain appropriate working capital for the day-to-day operation of the power plant, among other things.

The suggested programme allows Discoms to pay financial dues in convenient instalments. A one-time relief is being explored for all Discoms, in which the amount owed (including principal and LPSC) on the day of scheme announcement will be frozen, with no future imposition of LPSC.

The Discoms will be able to pay the outstanding money in up to 48 instalments.

The postponed liquidation of unpaid dues without imposition of LPSC will allow Discoms time to shore up its finances. At the same time, the producing firm will profit from guaranteed monthly payments that might otherwise be unavailable to them. "However, if a Discom fails to pay an instalment on time, the Late Payment Surcharge shall be charged on the whole outstanding dues that would otherwise be excluded," the statement stated.