PSEBEA apprehensive about financial condition of PSPCL; suggested options to finance minister
Kanwar Inder Singh/ royalpatiala.in
PSEB Engineers Association (PSEBEA) today met Punjab finance minister Harpal Singh Cheema and discussed the issues related to improve the financial condition of Punjab power sector. The seven member delegation of Association was led by President JS Dhiman and general secretary Ajay Pal Singh Atwal.
“The major component of losses under PSPCL is the low collection efficiency which is mainly due to delayed receipt of subsidy . Last year due to the non-receipt of full subsidy collection efficiency of PSPCL stands has reduced to 89.94% resulting in an increase in AT&C losses up to 20.38% “ said the spokesperson of the association.
PSEBEA apprehensive about financial condition of PSPCL; suggested options to finance minister . As per association spokesperson, the financial position of PSPCL has steadily deteriorated. While the average revenue realization in paisa per unit was lower than the average cost of supply, the corporation has resorted to taking loans from banks and financial institutions to meet the operational expenditures.
The association has given some important suggestions for improving the financial position of the corporation:
- Approval of RDSS (Revamped Distribution Sector Scheme) by Finance Department Govt. of Punjab.
The Ministry of Power GoI launched RDSS with the objective of improving the quality and reliability of power supply to consumers through a financially sustainable and operationally efficient distribution sector. The scheme aims to reduce the AT&C losses to 12-15% and the ACS-ARR gap to zero by 2025. The scheme has a total outlay of 3 Lac Crore. All State-owned Distribution Corporations, excluding private sector power companies, are eligible for financial assistance under this scheme. The duration of the scheme is 5 years up to 31-3-2026. Other state governments ( Andhra Pradesh, Gujrat, Himachal Pradesh, Kerala, MP, Uttarakhand, Assam, J&K, Meghalaya, Mizoram, Rajasthan, Tamil Nadu and UP) have already got schemes approved worth 90459 Cr.
For Punjab the action plan amounting to 25237 Cr. Approx. pending with the Finance Department Government of Punjab from Dec 2021. Instructions be issued to FD to expedite the approval of the scheme on an urgent basis otherwise Punjab will lose investment (GoI grant) in Power Sector .
- Timely Payment of Subsidy
The major component of losses under PSPCL is the low Collection Efficiency which is mainly due to delayed receipt of subsidy amount from GoP. It is pertinent to mention that during FY 2020-21, due to the non-receipt of full subsidy from the State Government collection efficiency of PSPCL has reduced to 89.94% resulting in an increase in AT&C losses up to 20.38%. More than 9000 Cr subsidy dues are pending with the State Government as of date. Timely disbursal of full subsidy by GoP is of utmost importance for the reduction in AT&C losses under PSPCL.
Suggestions:
- Govt departments be issued instructions for timely disbursal of subsidy amount to PSPCL.
- GoP is paying a surcharge @ 9% to PSPCL, GoP can save Rs 440 Cr .per annum by issuing bonds or obtaining loans at its own level at lower interest rates of 5-6 % to pay subsidy Bill in advance to PSPCL.
- To reduce the agriculture subsidy bill of the state, Punjab Government schemes like Paani Bachao Paise Kamao, Direct Sowing of Paddy and Diversification of crops be encouraged.
- Defaulting Amount by Govt Departments
PSEBEA apprehensive about financial condition of PSPCL; suggested options to finance minister . The other reason for low collection efficiency under PSPCL is the huge outstanding amount against electricity connections under the State Government Departments. At the end of April 2022, defaulting amount to the tune of Rs 2366 Cr. is pending towards all Government Departments under Punjab State which is further increasing day by day. The major share of defaulting amount against GoP departments is from essential service connections which could not be disconnected being essential services.
A list of Major Defaulters departments is as below:
Department Defaulting Amount (Cr)
Department of Water Supply and Sanitation 1,095
Department of Local govt 718
Department of Rural Development and Panchayat 264
Department of Health and Family Welfare 100
Department of Sewerage Board 73
Department of Irrigation 34
Department of Home Affairs and Jails 19
Suggestions:
- Releasing sufficient funds to government departments for clearance of their outstanding dues against electricity bills. Secretary incharge of the department be made responsible for ensuring clearance of bills in a timely manner.
- Instructions be issued to all Govt departments to pay their electricity dues in a timely manner. One time settlement scheme can be launched for the defaulting departments by PSPCL.
- State Government departments be encouraged to opt for prepaid metering.
- To further decrease the electricity bills of State Government Departments, all Government Departments must opt for Solar Net-metering.
“PSEB Engineers’ Association is a professional body of Power Engineers, representing 2000 engineers working in PSPCL/ PSTCL right from Asst. Engineers to Engineer-in-Chief. The main objective remains the healthiness of the Punjab Power Sector and we have always given our unbiased view on the matters concerning the Punjab Power Sector. The Association assures you that all power engineers are with the Government, for any positive steps taken to improve the efficiency and health of the power sector for fulfilling the commitment of the State Government to provide reliable and affordable power for all” added the spokesperson.
June 14,2022
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