PSEB’s cumulative gap at Rs 6,575 cr
Jangveer Singh
Tribune News Service

Chandigarh, January 6
The Punjab State Electricity Board (PSEB) has registered a cumulative gap of Rs 6,575 crore for the past three years. As the gap is increasing by the year, it indicates financial health of the board is the rapidly deteriorating. According to details submitted by the board to the Punjab State Electricity Regulatory Commission, out of the total annual revenue requirement (ARR) of Rs 16,612 crore for 2010-11, the component of interest charges is Rs 1,923 crore. The interest charges for 2008-09 were Rs 1,195 crore, which have gone up to around Rs 1,625 crore in 2009-10 and are expected to go up to Rs 1,923 crore in 2010-11.

According to the ARR, the component of Rs 1,923 crore as interest charges includes a chunk of Rs 596 crore on account of working capital loans. According to the projected figures of the PSEB for 2010-11, the opening loan as on April 1 this year is likely to be around Rs 16,720 crore. The board has projected an addition of Rs 10,858 crore, a likely repayment of Rs 7,141 crore and a closing balance of Rs 3,717 crore.

The board also seems to have become a classic example of a vicious debt trap. It has projected that it will take a loan of Rs 5,969 crore in 2009-10 to repay an earlier loan of Rs 5,969 crore with the closing balance being the same as the opening balance. However, by initiating the process of taking fresh loans to repay earlier loans, the board has taken on a liability of Rs 596 crore, which is the interest to be charged on the fresh loan at the rate of 10 per cent.

The PSEB admits that huge disallowances of actual costs by the Electricity Regulatory Commission have left a deep impact on the normal operations of the board and in the absence of financial restructuring, it was left with no option but to meet the expenses through short-term borrowings.