Govt seeks to bail out PSPCL
Vishal Rambani
PATIALA:

PUNJAB GOVERNMENT TO BECOME GUARANTOR FOR THE COMPANY; LOANS SOUGHT FROM TWO CORPORATIONS

All is not lost for the cash-strapped Punjab State Power Corporation Limited (PSPCL), as the state government has agreed to be its guarantor for bank loans.
The PSPCL has been denied loans by banks, following Reserve Bank of India (RBI) guidelines to tighten lending norms for power companies incurring losses.

The company has since approached other financial institutions to bail it out of the financial mess, including the Rural Electrification Corporation Limited (REC).

The director, finance, has written to the REC seeking a loan of Rs 300 crore to pay salaries. However, a reply is still awaited. KD Chaudhry, chairman and managing director, PSPCL, said, “The state government's move will help us get loans from banks. We have invited fresh tenders for the purpose.“ He added that the company had also approached the Power Finance Corporation for loans to meet their working capital needs. “The shortage of working capital is problem as of now,“ said Chaudhry.

Sources said that the PSPCL had also asked the state government for early release of the subsidy, which the government pays every month for free electricity supply to the agriculture sector.
The government has to pay Rs 282 crore per month, but it usually pays it in two instalments every month. The PSPCL has received Rs 140 crore this month and has requested for the early release of the second instalment in order to meet the salary deadline.

The PSPCL has more than 60 thousand employees across the state.

“We are hopeful of managing things from October onwards,“ Chaudhary added.

“This is not a long-term solution,“ said a PSPCL official, on condition of anonymity. “It is high time the company started thinking about generating resources and met the loans, which the government failed to clear for the erstwhile PSEB.
The PSPCL should have been started with a clean balance sheet, but that was not the case.
Now, previous loans are taking their toll on the financial heath