Punjab Sees More Power In Pseb Restructuring

The Punjab government has approached the Power Finance Corporation (PFC) for assistance in restructuring of the state electricity board.

The government is understood to have made up its mind to replace the Punjab State Electricity Board (PSEB) with three separate companies for generation, transmission and distribution. It has also decided to set up an independent regulatory authority.

The neighbouring Haryana is going ahead with the reforms for the past one year. It has succeeded in securing a World Bank loan of $600 million for the improvement of the power situation in the state.

It is understood that the Punjab government is also keen to secure a World Bank loan by implementing power sector reforms. The power situation in Punjab continues to remain bleak. The PSEB has been incurring a monthly loss of Rs 50 crore, mainly due to transmission and distribution losses.

 

Power experts are of the opinion that the state government has compounded its problems through its decision to give free electricity to the agriculture sector. This decision has caused an additional burden of nearly Rs 600 crore to the state exchequer every year.

Ironically, despite giving free electricity to farmers, the Badal government has failed to win the support of the peasantry at large. A large section of small and the marginal farmers do not have tube-wells and thus they do not benefit from the government decision.

Because of the power shortage, there are frequent power cuts, particularly in rural areas, causing resentment among the farmers.

There farmers are said to be willing to pay for the electricity provided they are ensured regular power supply. As the farming operations in Punjab are now by and large mechanised, a regular power supply in the villages has become more significant for the farmers.

The state government is hopeful that the power situation in the state will improve by the middle of this year with the commissioning of the prestigious Ranjit Sagar Dam on river Ravi.

The state government is confident that by the beginning of July, the Ranjit Sagar Dam will start generating an additional 240 mw of power.

The government has already spent Rs 2,427 crore on the 800 mw Ranjit Sagar Dam project. The work on the project began more than two decades ago.