Punjab yet to adopt power utility financial restructuring scheme

DP CORRESPONDENT/ Chandigarh

The Punjab government is yet to take final decision on Centre’s financial restructuring scheme for power distribution companies as state power utility is facing short term liabilities to the tune of Rs 10,000 crore.

Chief Secretary Rakesh Singh is expected to meet the officials of state power department on December 4 to take an overall view on the financial restructuring scheme which also includes its financial implications, a senior official said here on Sunday.

The scheme, which requires the state power utility to achieve financial turnaround, is open till December 31, 2012 unless it is further extended by the Centre.

The state-owned Punjab State Power Corporation Limited is saddled with short-term liabilities of Rs 10,000 crore as on March 31, 2012. With expected revenue of Rs 19,000 crore in current fiscal, the utility had projected revenue gap of Rs 8,984 crore for 2012-13.

Of the average cost of power supply, 50-60 paise per unit constitutes only as interest component, an official of PSPCL said.

As per the financial restructuring programme, the state government will takeover half of short-term liabilities of power utilities and they would be converted into bonds to be issued to lenders, backed by state government guarantees.

The state Finance Department would also see how much fiscal space is available with it to take over the liabilities in the wake of poor fiscal situation of Punjab, official disclosed.

The rest of debt liabilities will be rescheduled or restructured and there would be a moratorium of payment of principal amount.

The Centre would also provide incentive to the tune of 25 per cent of principal repayment by the state government on the liability taken over by it under the scheme. “If we go with this scheme, we are eligible to get grant of Rs 1,250 crore from the Centre under this scheme,” the officer added.

The neighbouring state Haryana has already given an in-principle approval to go ahead with the financial restructuring plan of power distribution companies and is aiming to achieve turnaround of debt-ridden power utilities in next three years.
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