Tuesday, June 08, 2010

The bankrupt Punjab State Electricity Board is bifurcated

PSEB had a staggering debt of Rs. 16000 crore with fiscal deficit at Rs. 9000 crore. The market value of the total assets of PSEB is about Rs. 30,000 crore. The new companies would start from zero balance and would not inherit the legacy of the financial mess.

The engineers' associations have finally welcomed the move as the government has allayed the apprehensions of the stakeholders like the employees and the farmers. The government has convinced them that it was mainly the management system which had undergone a change and these sections would not be affected in any manner. The service conditions of the employees would remain the same. The farmers would continue to enjoy the facility of free power for the farm sector. Dalit households would also get the same facility of free power as earlier. The government took pains to make the situation transparent saying it was not privatisation but only corporatisation.

However, Dr. Joginder Dayal, member of the CPI national executive would not share this perception of the state government saying, “It is just the first step towards privatisation. Moreover, the states where the power boards have already been dissolved have not benefited in any manner and the consumers have to cough up more than before”. West Bengal has already implemented the Electricity Act, 2003 where the CPI is a partner in the government. Of course, power tariff is much higher in neighbouring Haryana where the power board was trifurcated much earlier. However, there are some states in India where unbundling of the power supply board has been a spectacular success.

As per the policy announced by the state government, the chiefs of the two companies, along with the directors, would be appointed through an open process. The criteria for the selection are being given final touches. The Chief Secretary heads the committee for this purpose. Of course, the final decision would be taken by the political leadership. Powercom would have a total of eight directors, one each for generation, distribution, commercial, finance, human resources development and general administration, besides two nominees from the state government. The other company, Transco, would have four directors.
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Source :
IIPM Editorial, 2009


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