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PSEB to raise Rs 386 crore through bonds from public

Submitted by Gagandeep Singh... on Sat, 03/01/2009 - 9:39am
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PSEB to raise Rs 386 crore through bonds from public

Gagandeep Ahuja | Patiala

Punjab State Electricity Board (PSEB) has decided to to raise Rs 386 crore through bonds from the public. PSEB sources said here on Friday that a Delhi investment firm has been hired as arranger and the board would offer an annual interest of 10.15 per cent.

The Punjab Government, which has permitted the power board to raise Rs 500 crore, would stand guarantee.

The bonds have a put/call option at the end of the seventh year with interest payable annually and the issue, set to close on January 21.

Meanwhile PSEB has approached the Punjab State Electricity Regulatory Commission (PSERC) for an annual tariff hike for financial year 2009-10, not seeking any specific increase in the election year.

Sources said that, the cumulative revenue gap is Rs 3,000 crore to over Rs 6,000 crore and officials say in case the regulatory body calculates the hike in the same proportion, it would easily cross 50 per cent of the existing tariff.

PSEB has asked PSERC to announce the tariff keeping in view its current financial condition.

The cash-strapped board, under a cumulative debt of Rs 12,000 crore with whopping losses of Rs 7,000 crore, is not expecting any respite from the increase in tariff, as officials are looking at a hike of only 2 to 4 per cent.

In its tariff revision, PSEB has projected fuel cost at Rs 3,047 crore for the next financial year, power purchase at Rs 7,265 crore (up from last year’s Rs 6,507 crore), employee cost at Rs 2,447 crore and interest liability against loans at Rs 1,586 crore, which has also witnessed a major increase.

The annual revenue requirement has been projected at Rs 15,807 crore and revenue gap Rs 3,039 crore, Rs 6,980 crore if calculated cumulatively .

Going by the figures in tariff petition PSEB requires Rs 19,716 crore and to reach this, there should at least be increase of 54 pc in the tariff. The tariff petition, to be filed by November 30, has been delayed by a month and is expected to be announced on April 31.

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