The Punjab government and the Union power ministry are on a collision course on the issue of another extension for the unbundling of the Punjab State Electricity Board for which the state government is seeking extension for the record ninth time.

The Union power secretary Anil Razdan had pulled up chairman of Punjab State Electricity Board, YS Ratra asking the state to restructure its power utilities in line with the provisions of the Central Electricity Act, 2003. Punjab like Bihar, Tamil Nadu, Kerala, Himachal Pradesh, Chhattisgarh and northeastern states has been seeking extensions for the unbundling of its electricity board.

Instead of giving its consent to the tough stance adopted by Razdan, the Punjab government has demanded allocation of more funds in view of free power to the farm sector for which the state provided more than Rs 2,000 crore per year to Punjab State Electricity Board as power subsidy from the Centre. Parkash Singh Badal has made the case for subsidy and has sent a demi official letter to Union power minister in this regard.

The controversy of unbundling PSEB in different companies has been going in for the last about six years. Recently, PSEB Engineers Association had suggested that it is possible to retain the Board without disturbing the present set up of the PSEB to meet the legal requirements of Electricity Act 2003. This can be done by creating a new company to ?trade? power as per provisions of the Electricity Act 2003.

Interestingly, the state government, which appointed Ernst and Young to deliver their expertise on the issue had suggested separate companies for generation, transmission and three distribution companies besides a holding company. However, the government did not pay any heed to the recommendations.

The president of PSEB Engineers Association, HS Bedi said the financial burden for restructuring of PSEB would be huge considering the present annual subsidy of 2,700 crore and accumulated loss of about Rs 8,000 crore. While this was cited as a reason for a delay in the unbundling of the PSEB, but major reason is believed to be the 68,000 strong workforce that the PSEB employs.

Little doubt prevails that the Punjab government is reluctant to go in for breaking up the Board before the forthcoming Parliamentary elections as it feels the exercise may harm its political prospects with Board employees opposing the move.