Punjab fails to bail out power utilities
Wednesday, 29/08/2012
http://www.tribuneindia.com/2012/20120829/punjab.htm#4
Patiala : With the Punjab government failing to pay attention to bail out the cash-strapped Punjab State Power Corporation Limited (PSPCL) and Punjab State Corporation Limited (PSTCL), the fiscal health of the two power utilities has worsened.
In the past two years, the debt of these utilities witnessed a drastic increase of Rs 2,800 crore. Official figures reveal that the total debt of the erstwhile Punjab State Electricity Board (PSEB) was Rs 15,171 crore as on March 31, 2010. It increased to Rs 18,000 crore as on March 31, 2012.
During bifurcation of the PSEB on April 16, 2010, the government had assured to introduce a financial restructuring plan (FRP) to ensure that the financial condition of the newly formed entities comes on track.
The National Electricity Policy (NEP), framed as per the Electricity Act 2003, also states that the power utilities should not to be burdened with the past liabilities. The state government had agreed in the tripartite agreement to frame and implement the FRP by March 2011. However, the plan is nowhere in sight.
Following a directive of the Reserve Bank of India (RBI) to tighten loans for state power distribution companies that have losses to the tune of Rs 5,000 crore and more, several financial institutions and banks have stopped disbursing short-term loans to the power utilities.
President of the PSEB Engineers' Association Baldev Singh Sran said the Punjab Government had not provided any post-unbundling help to the power utilities. "Even free power subsidy is not being given on time. Second major reason for the poor financial health of PSPCL/PSTCL is zero investment in power generation under the state sector and dependence on outside sources to purchase power," he asserted.
PSPCL has already purchased power worth Rs 1,500 crore through short-term power purchase agreements this summer season. "The answer lies in adding to the generation capacity of the state by undertaking new thermal plants under the state sector. The proposal to set up 1,320 MW thermal plant at Mukeria has been hanging fire for the past more than a year," said a senior technocrat.
