The move to bring about reforms in the power sector in Punjab through private public partnership seems to have backfired.
While the deadline for unbundling of Punjab State Electricity Board (PSEB) expired on May 31, Punjab chief minister Parkash Singh Badal has sent a letter to power minister seeking extension for another six months. Government sources said the letter was sent in May but response of the Centre was still awaited.
Sources told FE here on Tuesday that the PHD Chamber of Commerce and Industry (PHDCCI ) too had impressed upon the chief minister the need to bring about bold reforms because cumulative losses of PSEB in last three years had been Rs 5,254 crore. The chamber had suggested that unless required funds are available, the state may not be in a position to upgrade and modernise the distribution system and attract investment in development of new projects. Private participation in distribution under the PPP mode was the best option because private managements may usher in professional efficiency and bring required investments.
However, the PHDCCI model has been turned down by the PSEB engineers association. President of the association HS Bedi said although reforms in the power sector were introduced in 1990 to attract private investment, yet ?over dependence on private sector for capacity has already played havoc earlier with plans of the Centre to bridge the demand-supply gap in the country.