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Railways’ ultimatum to PSEB
Jangveer Singh
Tribune News Service

Patiala, August 31
After the cash-strapped Punjab State Electricity Board (PSEB) gained a temporary reprieve from coal companies threatening to stop the supply of coal by making some payments, the board faces a threat from the Railways which has asked it to pay its dues, amounting to Rs 500 crore, by September 2, failing which it will stop transporting coal for the board’s thermal plants.

Highly-placed sources disclosed that a letter to this effect was received by the board authorities yesterday. No decision had been taken on the letter till this evening and the board is expected to deliberate upon the issue on September 2, the last date of the deadline.

The sources said the issue was not only regarding the payment of dues of Rs 500 crore as claimed by the Railways but that of the actual amount of dues. The board has questioned the Rs 500 crore figure, claiming that it had to pay the railway authorities Rs 260 crore only.

Board member (Generation) H.S. Sahai said the PSEB had already written to the railway authorities that it was passing through a financial crisis and was not in a position to pay its dues immediately. He said the Railways had been informed that the board was awaiting a decision regarding tariff revision and had asked it to bear with the board for some time. He said the board had also communicated to the Railways that it only owed it Rs 260 crore which would be paid back in due time.

The sources, however, told TNS that the Railways was asking the board to clear a debt of Rs 500 crore as it had reneged on an agreement entered with it. They said under the agreement, the board had agreed to pay the monthly freight charges of the Railways, amounting to around Rs 85 crore, in advance. For doing so, the Railways had agreed to give it a 15 per cent concession on coal prices. The sources said the Railways was clear on the fact that it would withdraw the concession in case the board defaulted on paying it in advance.

The sources said the board had first reneged on the agreement in October-November last year.

Even though the Railways had warned the board against this, the board had insisted on making some part payment to ensure the advance remained with the board. The sources said in the following months the advance was reduced to Rs 70 crore and near March to around Rs 50 crore following which the board started completely defaulting on its payments.

The sources said the Railways had, according to the terms of the agreement, stopped offering any concession to the board on the freight charges ever since it defaulted on the payment of advance in full. They said even though the board might say that it would pay the Railways only Rs 260 crore, the case might go to the court as the Railways had on a previous occasion some years back refused to give any concession to the board when it briefly reneged on its terms of agreement.

Mr Sahai said the board’s payments to the Railways were clear till March this year and the dues had accumulated only after that.

The board has been juggling with funds to ensure the supply of coal to its three thermal plants at Ropar, Bathinda and Lehra Mohabbat. Coal companies have twice stopped the supply to the board because of non-payment of dues. The board had recently pleaded with the coal companies to resume the supply after making a payment of Rs 30 crore this week of the total dues of Rs 112 crore.

Though supplies may start trickling in somewhat after this payment, the sources said the board had been put in a greater fix now, with the Railways demanding a payment of Rs 500 crore which it was ill-equipped to make. Two of the three thermal plants at Ropar and Bathinda have a coal stock of less than 10 days.