CHANDIGARH: The Punjab Government has been given seventh extension up to February 29 next year for unbundling of  Punjab State Electricity Board and it seems that the die has been cast for restructuring of PSEB.

The controversy of unbundling PSEB in three/ several companies had been going in for the last five to six years. Recently PSEB Engineers Association has suggested that it is possible to retain the board without disturbing the present set up of the PSEB to meet the legal requirements of Electricity Act 2003 .This can be done by creating a new company to “trade” power as per provisions of the Act 2003.

Punjab Government has reappointed Earnest and Young as consultant to submit report on the restructuring of the PSEB. Earlier also this consultant had suggested separate companies for generation, transmission and three distribution companies besides a holding company. It may be mentioned that the consultants had initially demanded a six month period to update the report but the Government has asked them to speed up the process.

The restructuring of PSEB is a high risk, low return and irreversible process and all the stake holders must be involved in the process. Expert committee headed by Gajendra Haldia in 2003 had suggested that an investment of Rs. 16000 crores was required in next five years and had suggested privatization of generation and distribution sector.The committee had also suggested conversion of state Government loans in to equity and taking over the liabilities related to employee’s retirement benefits
It may be added that the present financial burden for restructuring of PSEB would be huge keeping in view present annual subsidy of 2700 crores and accumulated loss of 8000 crores. Even PSEB has already utilized more than 1200 crores of employee’s provident funds for its capital work .PSEB has now resorted to market borrowing even to meet the operational expenses. This winter the PSEB has no funds to purchase extra power to avoid long power cuts.

As per list of projects expected to be commissioned during 11th plan circulated by the Planning Commission, Punjab is expected to add maximum of 1675 MW out of which 1275 MWs (600 MW from Talwandi Saboo, 600 MW from Goindwal Sahib & 75 MWs from UBDC-III) has been identified through private sector. The bidding process for one thermal plant at Talwandi-Sabo is at the initial stages and land is yet to be acquired. Other proposed projects at Rajpura, Sito-Guna etc are still on the drawing board stage.  It would be thus safe to conclude that after commissioning of Lehra-Mohabbat Stage II thermal plant, no generating capacity would be added in the state in the next 5 years.
Over dependence on private sector for setting up the new projects would not be in the interest of state. The Goindwal project by GVK which was started more than six years ago has failed to take off. Government of India’s over dependence on private sector resulted in achievement of only 53.77%, 47.25% and 57.52% of capacity addition targets fixed during 8th 9th & 10th Plans respectively.

Failure of reform process in different states is mainly due to political interferences in day to day working of the state power utilities. Delhi and Orissa are the best examples of failures of reforms. The performance of power sector and achievements depends a lot on Government support and policies.

Gujarat is an example where the reforms have yielded results. 24 hour power supply without any cut during last one year is no mean achievement. Government is ensuring full and timely payment of subsidy besides states determination to check theft of power. Even the residences of political high ups have been checked for theft of power.

In Andhra Pardesh the unbundling took place in 1999and main reason for the improvement in Andhra Pardesh was that even though there were separate companies practically the entire power sector was working in unison like an integrated state electricity board without any interference from the Government.

If the reforms in power sector of Punjab are to succeed after the restructuring of PSEB, the Government would have to stop interference in day to day working of power utilities and should heed to the advice of professionals. Power is a vital sector for the success of economy of state this can not be left to bureaucrats.