Punjabs beleaguered power corporation is sinking into a deep fiscal quagmire. The performance audit of the board,between April 2006 and March 2011,conducted by the Comptroller and Auditor General of India (CAG) says that the entire capital and reserves of the Punjab State Power Corporation Limited had eroded by 2008-09.
Stating that the state power corporation is reeling under high accumulated losses,the CAG report says that its losses during this period jumped by 62.41 per cent – from Rs 5,980 crore to Rs 9,712 crore. The CAG blames a host of reasons for the situation the Punjab State Power Corporation finds itself in. They include:
The level of borrowing is high involving huge payment of interest. During the audit period,the companys loans increased by 53.6 per cent – from Rs 11,285 crore in 2006-07 to Rs 17,336 crore in 2009-10.
Purchase of power
The company was not able to meet the demand and power deficit increased by 188.65 per cent from 5,376 million units to 15,518 million units. To bridge the gap,it entered into short term power purchase agreements at exorbitant costs incurring a total of Rs 5,062 crore on such purchases. The panic purchase averaged to Rs 5.75 per unit when average realisation of revenue was Rs 3.5 per unit. It also resorted to unscheduled interchange from the grid again incurring high costs.
High theft rate
The report also cites substantial commercial losses owing to theft by tampering of meters and unauthorised hooking. The company failed to fix targets for checking of the connections – it declined to just 28.23 per cent in 2010-11. The amount realised against amount assessed on thefts too saw a decline.
Of the 11.43 lakh agricultural pumpsets,meters have been installed only on 1.18 lakh consumers. Due to inconsistency in AP consumption,the regulatory commission disallowed Rs 723 crore demanded by the company in its revenue petition.