Patiala, March 21
Failure of the Punjab government in releasing free-power subsidy payment amounting to Rs 1,400 crore to the Punjab State Electricity Board (PSEB) has brought the board on verge of financial collapse.

In clear defiance to the Punjab State Electricity Regulatory Commission (PSERC), the state government has failed to pay subsidy for the free power in quarterly advance installments to board.

Highly placed sources in the board have revealed that the board may not be able to disburse salaries to its employees, in case immediate remedial measures are not taken by the state government. Though last month, the government had assured the PSEB that pending subsidy would be cleared soon, but to no avail.

The sources have also confirmed that fiscal health of the board has deteriorated so much so that payments to employees from their own provident fund, reimbursement of medical bills and TA bills of employees has been stalled. Besides, payments of suppliers and contractors have also been stopped, delaying the execution of various demand side management projects being undertaken for saving the power through conservation and anti-theft measures etc.

Worried over the deteriorating financial condition of the PSEB, the PSEB Engineers’ Association has shot off a letter to Punjab Chief Minister Parkash Singh Badal. Association president HS Bedi mentioned in a letter, “PSEB has already taken out amount of over Rs 1,800 crore from the employees’ provident fund. Besides, an amount of Rs 700 crore in form of loan payment is due towards the PSEB during this month and the PSEB has not only overdrawn Rs 200 crore from its overdraw limit, but has also exhausted its borrowing limit.”

Information available shows that since 2006-07, the PSEB had been continuously registering commercial losses. The figures of the loss incurred by the PSEB stands at Rs 1,800 crore (2006-07), Rs 1,611 crore (2007-08), Rs 1,292 crore (2008-09) and Rs 1,623 crore (2009-10). The sources said the commercial loss in the coming fiscal (2010-11) is expected to cross Rs 2,300 crore. Because of the continuous losses, the PSEB has been taking loans to meet its operational revenue expenditure with interest liability increasing from Rs 668 crore in 2006-07 to over Rs 2,000 crore during the current fiscal.

Furthermore, perusal of some files brought to light that during the financial year 2007-08, in another defiance of PSERC instructions, out of total outstanding loan amount of Rs 3,075 crore, the state government had adjusted Rs 1,362 crore towards subsidy payable to the PSEB. “Under the prevailing circumstances, the government should immediately pay the unpaid subsidy to the tune of over Rs 1,400 crore to the board in cash,” demanded the PSEB Engineers’ Association general-secretary Bhupinder Singh.