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Power shocks

Punjab’s fiscal bankruptcy has revealed itself not just through the massive debt pile-up or delayed salary payments; it came through government departments defaulting on electricity bills as well.



Punjab’s fiscal bankruptcy has revealed itself not just through the massive debt pile-up or delayed salary payments; it came through government departments defaulting on electricity bills as well. Financially starved departments had no money to pay for electricity. Headed by a pliable CMD who has been politically nurtured with repeated extensions, PSPCL has lacked the nerve all these years to recover its dues. Politicians interfered and a compliant corporation leadership failed to stand its ground. It was for mutual benefit and convenience. Now that the code of conduct is in force in the state, PSPCL has tried to brighten up its dismal recovery track-record ahead of a new government taking charge.

When debt-ridden state electricity boards were dismantled and power reforms initiated countrywide, the stated objective was to curb political interference and run the power utilities on professional lines. Power boards were split and regulators appointed, but ruling politicians defeated the spirit of the reforms by putting in charge officials who danced to their tunes. Letting power dues mount to Rs 1,606 crore (till January 31, 2017) bespeaks of a huge PSPCL management failure. The recovery campaign launched in the last two months should have been a regular affair. From day one power should have been disconnected to anyone not paying the bill. The defaulters are not just government departments, which collectively owe Rs 745 crore to the corporation, but also private companies. For PSPCL managers going soft on the recovery of legitimate dues amounts to a betrayal of their own institutional mandate. Such a management is not expected to stand up to the state government and insist on timely payment of the subsidy. The interests of the power corporation have been sacrificed to humour the political leadership.

Since the power utilities suffered from a perpetual cash crunch private sector companies were brought in and encouraged through agreements which further hurt the utilities’ interests. An obligation to buy power, that too at non-competitive rates, meant shutting own hydroelectric plants that produced cheaper electricity. The ruling political leadership tried to electorally market the idea of Punjab being power surplus. For that the state has paid a heavy price.  

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