Cabinet clears PSEB restructuring,strike on

After seven years and 17 deadlines,the Punjab Cabinet on Thursday approved the unbundling of the Punjab State Electricity Board....

After seven years and 17 deadlines,the Punjab Cabinet on Thursday approved the unbundling of the Punjab State Electricity Board PSEB,hours before the expiry of the 17th extension granted by the Union Power Ministry to allow it to continue as a unified utility.

Soon after the Cabinet decision,the government tried to allay fears of protesting employees,who have launched a strike,by announcing it was just minimum restructuring and not privatisation of the board. The government stands committed to welfare of employees and farmers and was in constant dialogue with them. PSEB has been bifurcated into two state-run corporations to take the process of power reforms to its final stage and comply with the mandatory provisions of the National Electricity Act,2003. Both these companies will be fully owned and managed by the state government and there will be no private shares, Punjab Chief Secretary S C Aggarwal said during a specially convened press briefing.

He added that there would be no change in service conditions and benefits of the boards employees present and retired and subsidy to farmers,SC and BPL families would also remain unaffected and restructuring would not lead to higher power bills.

Pointing out that PSEBs accumulated losses amounted to Rs 10,000 crore and outstanding loans to Rs 16,000 crore,he said restructuring would enable the new companies to start with clean balance-sheets. Revaluation of the boards assets bringing their historic value at par with current market value will enable the power companies to secure more funds from banks and financial institutions against revalued asset base. Unbundling will allow Punjab open access to power throughout the country while segregation of transmission function will usher in greater specialisation, the chief secretary said.

Principal Secretary,Power,Arun Goel said the exercise to revaluate assets of the board was being done by a private consultant for the last one year,and assets and liabilities of the board would be distributed between the two companies Punjab State Power Corporation Limited Powercom and Punjab State Transmission Corporation Limited Transo as per the financial restructuring plan FRP. The provisional estimates peg the boards assets at Rs 30,000 crore. This was a conservative estimate and the figure could be higher,they said.

To begin with,all PSEB employees will be absorbed in Powercom and later 3,500 of them will be sent to Transco on deputation. Powercom would have one chairman-cum-managing director CMD and six directors in addition to two part-time directors.

On the contentious issue of appointment of CMD and directors,Goel said the appointment of directors would be done after inviting applications. The CMD can be from outside but the posts of directors have been reserved for those from PSEB, he said.