Tata Power has announced its decision to stop power supply to three Rajasthan-owned distribution companies, viz. Ajmer Vidyut Vitran Nigam, Jodhpur Vidyut Vitran Nigam and Jaipur Vidyut Vitran Nigam.

The three discoms, which have been getting power supply from Tata Power's subsidiary Coastal Gujarat Power, have defaulted on timely payment of dues that resulted in huge outstandings.

Tata Power said the discoms failed to fulfill the obligations in spite of frequent and regular reminders. The company added that it invoked its rights under the power purchase agreement and decided to halt power supply to the discoms.

However, the power supplier did not specify the amounts the Rajasthan-owned distribution companies owe it.

On the other hand, C S Chandalia, director of power trading in Rajasthan, complained that Tata Power decided to discontinue power supply to the discoms without issuing any notice.

When contacted, Chandalia said, "We have never got any notice from Tata Power, though on many occasions, we got payment reminders, which is a normal affair and till now, no generation company has taken the drastic step of discontinuing supply for payment delay."

On an average, the Rajasthan-owned distribution companies require 17 crore units per day, and buy just 50 lakh units (3% of the total requirements) per day from Coastal Gujarat Power.

The three discoms procure the bulk of their requirements from government-run suppliers like NHPC, Satluj Jal Vidyut Nigam and NTPC.