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Home News Power Sector News Post restructuring, Punjab power sector in trouble- PSEBEA

Post restructuring, Punjab power sector in trouble- PSEBEA

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PSEBEAPSEB Engineers' Association who had supported the PSEB unbundling, now says that new power utility is in trouble. Post restructuring of the Punjab State Electricity Board, the financial position of Punjab State Power Corporation Limited (PSPCL) is still critical as the government has not paid the power subsidy in cash but adjusted Rs. 3,075 crore against loan, according to the PSEB Engineers' Association.

The views were expressed at a seminar held at Chandigarh on 27-02-2011 on ‘Challenges in Power Sector in Punjab after restructuring'.

Former Union power secretary R V Shahi said the previous practice of the Punjab government to adjust subsidy against loan was against Section 65 of the Electricity Act 2003. "Free power to the agriculture sector must be discontinued to avoid wasteful and inefficient use of power and help control the depletion of water table," he said, adding that supply to tubewells must be metered and if govt wanted so, it could directly give subsidy to the farmers.

The Punjab State Electricity Regulatory Commission (PSERC) had not been fully allowing the revenue expenditures actually incurred in the past years and the disallowances had accumulated to Rs. 7,545 crore. The revenue gap had resulted in increased borrowings from financial institutions and the working capital loan had increased to Rs. 9,500 crore, while the total loan had gone up to Rs. 15,164 crore in 2009-10. The association proposed that the financial restructuring plan must be finalised and immediately implemented so that the previous debt burden was removed.

Stating that total dependence on the private sector for setting up new thermal projects was not right, it was proposed that the recent MoUs for new projects at Mansa, Rajpura and Kot Shamir, along with that for extension units at Talwandi Sabo, Rajpura and Goindwal plants be cancelled and a 1,320 MW thermal power station in the state sector taken up by the PSPCL.

Source- Indian Express


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