PSEB owes Rs 2,050 cr: Govt
Jangveer Singh
Tribune News Service

Chandigarh, June 24
The Punjab State Electricity Board (PSEB), which is already in the red with accumulated losses of Rs 7,370 crore, has been put in another fix with the state government claiming it owes it Rs 2,050 crore on account of return on equity. This was revealed at a recent meeting of the Punjab State Electricity Regulatory Commission (PSERC) when the PSEB demanded a refund of Rs 500 crore, which it said was on account of excess interest paid to the government.

The government, which claimed as an investor it could not be denied interest on its loans, is set to file an appeal on the matter.

However, leave aside refunding the Rs 500 crore, the government has brought it to the commission’s notice that PSEB had not paid it Rs 413 crore per annum return on equity put up by it to set up the board. This outstanding amount has not been paid since 2003-04.

The government has asserted it was “strange” that the annual equity due to it, which had been allowed by the commission and was being recovered from the consumer, was not being paid. It said this had happened despite a signed statement by PSEB’s financial adviser asking the board to pay the dues.

Meanwhile, sources said the government realized that asking the PSEB to cough up this huge amount when it was in such a precarious financial position was not possible. They said the government could also not refuse to pay a subsidy of Rs 216 crore per month as mandated by the regulatory commission to offset the losses incurred by the board in supplying power free of cost to the farm sector as this would deny the latter of much needed funds.

Accordingly, the government has suggested the funds due on equity be converted as equity or be converted into loan. The sources said if the Rs 2,050 crore is converted into equity PSEB will have to pay a return of about Rs 700 crore (much more than the Rs 413 crore at present) to the government annually.

Meanwhile,the issue of dismantling it has been taken forward further, despite an earlier understanding that the board would be dismantled after the parliamentary elections.

According to a letter written by Punjab Chief Minister Parkash Singh Badal to Union Power Minister Sushil Kumar Shinde, it has been requested that the PSEB be allowed to exist in its present shape till December 15 this year. The letter says: “It is hoped the period of reorganisation of the board shall be completed during this period, particularly after the paddy transplantation season is over on September 30”.