Pre-poll power sops bleed Punjab exchequer

Aman Sood

Tribune News Service

Patiala, November 10

The pre-election doles of the state government in terms of various relaxations in the power sector are bleeding Punjab State Power Corporation Limited (PSPCL), which has to rely on loans to manage its working.

As per latest data, of the Rs 17,800-crore subsidy required to be paid by the Punjab Government, around Rs 10,284 crore was payable by the end of October 2021, but only Rs 5,647 crore had been paid while Rs 4,637 crore was pending.

The PSPCL is suffering due to this default as this has created serious cash flow problems. “Even the payments of retired employees have been delayed. Due to non-payments of subsidy, regular development works and new generation plants are not being executed departmentally. Due to financial constraints, the PSPCL is unable to infuse equity in new projects. And this is the major reason for the coming up of private thermal plants due to which power consumers of Punjab are suffering badly,” reads a letter to the CMD, PSPCL, by the PSEB Engineers’ Association.

The Charanjit Singh Channi government’s power announcements are expected to cost the cash-strapped Punjab Rs 4,966 crore. The latest reduction in power tariff by Rs 3 per unit for those having a load of up to 7 KW will put an additional burden of Rs 3,316 crore on the exchequer.

“Now, the PSPCL management, instead of asking the government to clear the pending amounts or to implement the tariff on the subsidised consumers in view of default by the government, has waived arrears of defaulting consumers to the tune of Rs 1,500 crore and is contemplating to implement reduction in tariff resulting in loss of Rs 3,300 crore more on the instructions of the state,” reads the letter.

Further, power bills amounting to around Rs 2,000 crore of government departments are also pending. Even the payment of Rs 137 crore of SC and BPL consumers written off by the Punjab Government in 2016, just before Assembly elections, is still pending to be paid to the PSPCL. Non-payment of subsidy has created serious financial trouble for the PSPCL. “The financial constraints have already been reflected in the shortage of essential material, delayed payments to suppliers and contractors, thus hindering the works. This will also affect parameters considered for the rating of the company thereby increasing the financial cost. This can render the corporation ineligible for many benefit schemes. This is ultimately going to be reflected in the quality of power supply to the consumers,” said PSEB Engineers’ Association general secretary Ajaypal Singh Atwal. PSPCL CMD A Venu Prasad said, “We are getting Rs 500 crore per month as cash subsidy. The balance is adjusted in electricity duty.”

No reimbursement of election doles

• Ahead of 2007 poll, the government had announced 200 free units for poor sections. In February 2010, units were cut to 100
• The units were again raised to 200. The bill dues accrued to Rs40.92 cr, forcing PSPCL to snap defaulters’ connections
• Later, the new government ordered re-connections, without reimbursing PSPCL. The dues now stand at Rs137.56 crore