Blow to Powercom
Gurpreet Singh Nibber [email protected]
PATIALA:

Instead of coming out with a relief package for the newly formed Powercom and Transco, the Punjab govern- ment has recalled pending loans of Rs 520 crore and electrici- ty duty of Rs 278 crore.
The government would adjust this pending amount against the cash subsidy for the first quarter (April to June) of this financial year.

Powercom owes loans taken for development projects to the state government since mid- 1990s. Earlier, officials said, the Punjab State Electricity Board used to depend on such loans for fresh projects and these were returned from time to time. “But as we entered the free-power regime, the finances of the board were hit and we are not in a position to return these loans,“ said a finance department official.

As per the tariff order of the Punjab State Electricity Regulatory Commission announced in April for 2010- 11, a sum of Rs 3,022 crore was worked out as the annual sub- sidy to Powercom, to be paid in advance on a monthly basis.

Going by the calculations, the Punjab government was required to pay Rs 252 crore every month. However, as per the government's communica- tion, it would not pay subsidy for three months till June. After these adjustments, Powercom doesn't owe anything to the state government.

Though Powercom is crying hoarse, the government is lend- ing a deaf ear.

Also, as per the Electricity Act 2003, the subsidy for free power to any consumer section should come in cash and not by any adjustment.

After the PSEB was bifur- cated on April 15, the Punjab government sent a commu- niqué to the interim commit- tee to adjust the cash subsidy for free power to the farm sec- tor against pending loans and electricity duty.

Three subsequent commu- nications from Powercom for release of subsidy failed to gen- erate a response.

In its third reminder on May 17, Powercom categorically said that it needs cash inflows to supply power to the agricul- ture sector keeping in view the paddy season. Powercom also said that it would not be in a position to survive without cash subsidy from June 10 to October 15 dur- ing the paddy season, so any adjustment could only be planned after that.

Powercom has been asked to give eight-hour supply to the agriculture sector. Contrary to its stand for adjusting cash subsidy against pending loans and electricity duty, the Punjab government has directed Powercom to arrange power from any outside source to feed the agriculture sector during the paddy season.

As per the expenditure worked out by Powercom, it requires Rs 1,800 crore for the purpose.

“We don't have a penny in our accounts and for any expen- diture we are depending on loans and loans over loans,“ said an officer of finance depart- ment of Powercom.

Interestingly as a counter measure, Powercom has stopped monthly payment of Rs 90 crore to the state gov- ernment against electricity duty.