Punjab gets more time for restructuring PSEB

The Punjab government has been given seventh extension up to February 29, for restructuring of the Punjab State Electricity Board (PSEB).

The controversy of restructuring of the PSEB in three or several companies has been going on for the last 5-6 years.

Recently, the PSEB Engineers' Association said it was possible to retain the board without disturbing the present set-up of the PSEB to meet the legal requirements of Electricity Act 2003, by creating a new firm to "trade" power.

The Punjab government has re-appointed consultants to submit report on the restructuring of the PSEB.

Earlier, the consultants had suggested separate companies for generation, transmission and distribution, besides a holding company.

The restructuring of the PSEB is a high-risk, low-return and irreversible process and all the stake holders must be involved in the process.

An expert committee headed by Gajendra Haldia in 2003, had suggested an investment of Rs 16,000 crore in the next five years, besides privatisation of generation and distribution sector.

The committee had also suggested conversion of state government loans into equity and taking over the liabilities related to employees' retirement benefits. The present financial burden for restructuring of the PSEB would be huge keeping in view present annual subsidy of Rs 2,700 crore and accumulated loss of Rs 8,000 crore.

The projects are expected to be commissioned during the 11th Plan circulated by the Planning Commission. Punjab is expected to add maximum of 1,675 Mw, out of which 1,275 Mw has been identified through the private sector.

However, experts feel that over dependence on the private sector for setting up the new projects would not be in the interest of state.

Meanwhile, following tough stance from the Punjab State Electricity Regulatory Commission (PSERC), the state government is considering giving power to the farm sector at a subsidised rate instead of free of cost in view of the poor fiscal condition, official sources said.