Govt yet to decide on Centre’s bailout package offer to debt-ridden PSPCL
Sarbjit Dhaliwal
Tribune News Service

Chandigarh, November 12
The Punjab Government has not made up its mind yet to accept the bailout package offered by the Centre to the Punjab State Power Corporation Limited (PSPCL) to restructure its fiscal liabilities.

Senior government officials met here today to discuss various aspects of the offer made by the Union Government. Though it was the second meeting held for the purpose, no decision could be taken.

Sources said the state government had told the PSPCL authorities to do some home work to find out whether it would benefit from the package. The power utility had been told to prepare a detailed report within a week describing the pros and cons of the offer.

Once that done, the issue would be discussed with Chief Minister Parkash Singh Badal. The state government is to respond to the offer by December 31. It would have to give in writing to the Union Government that it was prepared to accept the conditions and riders laid down in the bailout package and would implement the same within a fixed time frame.

Senior PSPCL officials are in favour of accepting the offer because it would shift most part of the debt burden on the state government.

Under the package, a financial restructuring scheme would have to be implemented by the state government after passing it in the assembly through 'State Electricity Distribution Responsibility Bill'. The state government would to some extent also have to bear the burden of the Rs 10,000 crore loan pending against the PSPCL.

About half of this loan would have to be paid to lenders through issuance of bonds, with the state government also paying interest on them (bonds).

The remaining past of the short-term loan would be rescheduled or there may be a moratorium on its payment. The Centre would pay 25 per cent of the rescheduled loan as incentive to the state government. Subsequently, all state government departments would have to pay their outstanding energy bills and also abide by other conditions in the scheme.

A senior official said most of the conditions laid down in the package by the Centre could be easily met by it. "Tariff is being revised annually for the past several years. Line losses have come down to 17 per cent and a considerable decline has also been witnessed in operational losses," he said.

Caught in red tape

State government officials have met twice to discuss the offer but no final decision has been taken so far

Under the package, a financial restructuring scheme will have to be implemented by the state government

Once the scheme is implemented, the Centre would reschedule the PSPCL loan or there may even be a moratorium on its payment