PSPCL lives on borrowed cash as debt mounts
Plea to PSERC

Vishal Rambani [email protected]
PATIALA:
CRISIS Govt fails to give promised subsidy to power body ; PSPCL's debt touches R20,000 cr ( )

The situation forced us to take loans. If we manage to control debts below R20,000 crore, it would be an achievement.

K D C H AU D H A RY CMD, PSPCL

he Punjab State Power Corporation Limited (PSPCL) is digging a hole for itself by taking loans to run day-to-day operations.
The PSPCL has taken loans of Rs 4,200 crore in the first four months of this financial year to make up for shortage of funds caused due to the open access policy and non-payment of the promised subsidy by government. With this the PSPCL's debt has touched nearly Rs 20,000 crore.

The Punjab government has to pay Rs 4,189 crore subsidy per annum against subsidy to the agricultural sector and free power to scheduled castes and backward class category domestic consumers.

The government promised this amount in an affidavit before the Punjab State Electricity Regulatory Commission (PSERC), which later in its tariff orders directed the government to pay Rs 394.08 crore to the PSPCL per month.

However, instead of paying the money in cash, the government settled Rs 981 crore through paper adjustments against loans.

In terms of cash payment, the government so far has paid only Rs 944 crore against the promised cash payment of Rs 1,576 crore to the PSPCL. A PSPCL director, on condition of anonymity, said that PSPCL is already reeling under debts, and non-payment of cash subsidy was forcing the corporation to take loans.

“We are even taking loans for payment of earlier loans, apart from day-to-day operations,“ he said. “Besides, we need a balance for power purchase as there is stress on meeting power needs for paddy and domestic consumers in the election year.“

PSPCL chairman and managing director KD Chaudhary said that the corporation was taking loans to “meet its needs“, as the earlier policy of open access “caused heavy loss to the corporation and also curtailed the cash flow“. Thus, it was “forced“ to take loans.

He said that he had taken up the matter of regular payment of subsidy with the government.

“We didn't want to take loans but the situation has forced us,“ Chaudhary said. “But if we manage to control debts below Rs 20,000 crore, it would be an achievement.“

Plea to PSERC

The Punjab State Electricity Regulatory Commission (PSERC), which is hearing a petition related to non-payment of the promised subsidy by the Punjab government, has asked the government to file its reply by September 20. GS Brar, a retired engineer of the erstwhile Punjab state electricity board, has approached the PSERC, accusing the state government of violating the commission's order by not paying the promised subsidy of Rs 394 crore per month