Govt wants Rs 1,100 cr from PSEB
Despite defaulting on payment of subsidy
Jangveer Singh
Tribune News Service

Chandigarh, March 18
The Punjab government, which has defaulted on paying Rs 1,400 crore in subsidy to the Punjab State Electricity Board (PSEB) in this financial year, now wants to “collect” Rs 1,100 crore from it.

The government apparently wants to make a paper adjustment against Rs 1,600 crore outstanding loan due to it. This despite the fact that the Board is on the brink of financial collapse as it has exhausted its bank limit. It has also overdrawn Rs 200 crore and still has to repay Rs 500 crore loans in this financial year.

The government wants to undertake this paper adjustment despite the fact that the tariff order of the State Electricity Regulatory Commission for 2009-10 had stipulated that it pay Rs 3,144 crore subsidy due to the PSEB in equal advance instalments.

The issue is now, likely, to be taken up by the PSERC for adjudication with a petition claiming that the government has defaulted in making subsidy payment in each and every month this year and should not be allowed to make any paper adjustment.

The petition, filed by Gurnek Singh Brar, claimed the PSERC ought to have invoked Section 65 of the Electricity Act, whereby, the Commission has the power to charge full tariff, in case subsidy is not paid in advance.

The petition has called for incorporating a specific provision in the 2010-11 tariff order to give practical shape to Section 65 of the Electricity Act. It has called for specifying that in case there is a default in advance payment of subsidy by 15 days, the new tariff as determined by the Commission would be applicable from the sixteenth day.

The petition has demanded that the PSERC ensure that the government does not adjust subsidy against loan as happened last year, when 1,362 crore was adjusted against loan. It claims this is a violation of the PSERC tariff order and also a commitment made by the government that it would pay subsidy in advance instalments.

It has also said the non-payment of subsidy by the government has created an acute financial crisis in the PSEB that is unable to pay its bill for power purchase in time, which may lead to forfeiture of rebate. The petition points out that for ensuring uninterrupted fuel supply to its thermal stations, the PSEB has to make advance payment for coal and railway freight. It claims these payments are now endangered.