PSEB sends SOS to govt asking for Rs 1,400 cr
Jangveer Singh
Tribune News Service

Chandigarh, March 22
The Punjab State Electricity Board (PSEB) has finally sent an SOS to the government, asking it to pay the board Rs 1,400 crore due to it for supplying free power to farmers and below poverty line consumers. The government has defaulted on paying this amount. The total subsidy due to the board this year is Rs 3,144 crore.

The letter, written recently, comes in the wake of the government move to undertake a paper transaction by asking the board to adjust this amount in lieu of loans due from it as well as electricity duty. It claims the board is in a “dire financial condition” and that cash is needed to make payments for power and coal purchase besides rail freight.

According to sources the board is apparently of the view that the government cannot adjust money due on account of subsidy against loans as per the new Electricity Act, 2003. However, it allowed such a transaction last year when the government adjusted Rs 1,362 crore against loans.

While the state is still to react to the letter, officials here today said it was perfectly in order to reclaim old loans as well as money on account of electricity duty. They said Rs 1,160 crore was due from the PSEB on account of old loans and Rs 540 crore as electricity duty. This means the PSEB still owes the government Rs 270 crore.

The government is likely to advise the board to raise more loans for which it will stand guarantee. This means the PSEB, whose working capital loan has increased from Rs 895 crore in 2005-06 to Rs 6,000 crore this year, will borrow more short-term loans at high rates of interest.

The cash-starved PSEB may also have to go in for large-scale power purchases in the summer due to low levels at both the Bhakra and Pong dams. Bhakra Beas Management Board member, Irrigation, MK Gupta said the water levels at both the Bhakra and Pong dams were 40 to 50 ft below last year levels.

The PSEB is likely to get an additional 300 MW from central sector plants and around 500 MW from other power producers. However, this additional 800 MW added this year would only compensate for the reduction in hydel generation as well as an expected 8 per cent increase in consumption.