State-run Energy Efficiency Services Ltd (EESL) is exploring various options, including legal action, to recover dues from urban local bodies (ULBs) across states under the Street Lighting National Programme (SLNP). Eesl is in talks with states and municipalities and looking at all possible amicable steps to recover the dues, chief executive Vishal Kapoor said in an interview. Besides, the company has sent notices to ULBs urging them to settle the dues. In case they fail, EESL will stop setting up street lights, Kapoor said, adding that a few ULBs have started paying their dues. EESL’s FY23 financial results showed that its trade receivables, primarily comprising dues from government bodies, stood at Rs4,152.47 crore as of 31 March. Kapoor said the company is planning a business overhaul. Edited excerpts:
What is the current status of dues, and what actions are you contemplating?
On the recovery front, I think we are extremely happy that we’re getting so much of support from the government…both the ministry of power, and the ministry of housing and urban affairs. They are working on making some kind of a mechanism, by which states do a central payment to EESL on behalf of ULBs. A lot of it is already happening in some states. Also, looking at what could be the big incentives and disincentives given to states by which the money starts coming back. That is about government action.
On our part, we are making big outreach to states. My team members, my state officers and I are reaching out to ULBs, and in some instances we have also issued notices. In some cases we have told them that if payments are not made then we will have to look at amicable ways of exiting.
We have been getting good traction from some states. There are accounts that were not moving at all for last three or four years. All the states have similar problems. Obviously states have their own fiscal situations, but we are very happy that a big chunk of money came back in July and we expect more.
There are some states where problems still exist. We are looking at all means, including legal measures, to see if it’s a completely non-moving (account), or exploring other, amicable ways.
We will be happy even if the payment starts coming in chunks, and it actually comes in chunks. Some ULBs do pay in part, once in a while, here and there, but most payment is also coming from state governments.
How do you plan to finance your growth, going ahead?
Right now, we have taken some consultants on board and in association with them, we are charting a full-fledged business plan for all verticals. We are seeing how we can defray costs, ring-fence earlier projects and go ahead with new ones. So, we are kind of ring-fencing the older projects, which have some problems, so that they can be dealt with through a separate strategy (that will not affect other project).
As a corporate, we have imperatives of ensuring that legacy dues and or other challenges do not come in the way of our expansion plans.
That is the most sensible strategy to go ahead with. Business plans that are being made right now are very robust, taking the learnings of the past both in trading and in the ESCO (energy services company). We are standardizing our business plans, procurement strategies, as well as client agreements or interface. We’re trying to look closely at our business strategy, including pricing. As we are in the sustainability business, our sustainability is also important. At the same time, we believe in shareholder value creation, and we ensure adequate public value is created.
Will you look at more tie-ups with state governments?
Yes, obviously. Generally, in street lighting, a lot of it has got saturated. It’s not like the old times when there were no street lights. And they were all seven-year contracts. So, while we’ll be definitely taking this forward, I believe EESL’s work as a government company is not only to sustain itself but also to ensure that new things keep coming up.
Gradually, we’ll also diversify our client-base. At present, 80-85% of my clients are ULBs or discoms. Institutionally, public sector entities are also there. But now that must increase and different types of PSUs should come in, given that ultimately, diversification of products and client-base will be a good derisking strategy. Probably, then we will look at the cooling space such as banks and ATMs. Ultimately cooling is an area we are very interested in. Because India Cooling Action Plan is in place, we estimate 60% of additional demand to come from cooling spaces in the future.
How do you see the EESL evolving down years?
If you see the prime minister’s vision, which aims net zero by 2070, there are large number of players who are working on the supply side. The only large player which is on the demand side or efficiency side, which is going to do this 40% is EESL. So, we do imagine ourselves to be enablers for net zero, big enabler for net zero on the demand side of things. So, enable for net zero on demand side I think there’s no one as big as us as of now and the way we we look at in both in terms of products and services through a mix of our own investments, as well as channelizing and catalyzing outside investments, private investments, that is the going forward we are looking at. If we have to get ₹8 trillion into the system, there’s no company that can do it.
Updated: 08 Aug 2023, 11:31 PM IST
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