Tavanir Pays $750 Million in Debts to Contractors and Bank

Tavanir Pays $750 Million in Debts to Contractors and BankTavanir Pays $750 Million in Debts to Contractors and Bank

The finance department of government-affiliated Power Generation, Distribution and Transmission Company (Tavanir) said the company settled $750 million of its debt to private power companies, contractors, suppliers and banks in the last fiscal that ended on March 20.
Government has so far paid a quarter of its total debt of $2.8 billion, ISNA reported.
Due to the huge difference in real energy costs and the bills sent to consumers, the government must annually pay at least $500 million in subsidies.
According to the Energy Ministry, the debt is due to disparities between real electricity costs, including generation, distribution and transmission, and what consumers actually pay.
There are 750 water and power projects, worth $13 billion, pending and cannot be completed unless the contractors are reassured that they will be paid.
To reduce the disparities, the government ratified a proposal by the Energy Ministry to raise electricity tariffs by 7%. The new rates come into effect later this month. 
Power generation, including production and transmission, costs 2 cents per kilowatt-hour. Electricity is presently sold at 0.7 cents per kWh.

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