Govt. owes nearly Rs. 2,000 cr. to KSEB

By P. Venugopal

THIRUVANANTHAPURAM, DEC. 22. The KSEB, which is tottering on the financial front, has made a fervent appeal to the State Government to release at least part of the total dues of Rs. 1,969.92 crores the Government owes it.

Of this amount, a sum of Rs. 1,300 crores is towards subsidy receivable for maintaining a 3 per cent rate of return as at the end of March, 2000.

A description of the amounts due under various heads was submitted to the Government by the KSEB the other day.

According to it, the amount due from the Industries Department for allowing some of the industrial units to remit power tariff at the pre-1992 rates comes to Rs. 150 crores.

In addition to this, a sum of Rs. 35 crores is due from the Industries Department for extending the pre-1992 tariff to certain industrial units to cover the period when there was 50 per cent power cut in 1996-97.

The arrears due from the low- tension Government consumers as at the end of March, 2000 comes to Rs. 12.17 crores and that due from high-tension/extra-high- tension consumers is to the tune of Rs. 233.70 crores.

The Tourism Department owes the KSEB Rs. 5.35 crores towards the application of industrial tariff to certain institutions certified by the Director of Tourism.

The amount of arrears from the Agriculture Department on account of free supply of electricity to paddy cultivators and other farmers is Rs. 5.01 crores.

The KSEB should also receive Rs. 228.69 crores towards subsidy from the Government for losses sustained by it while implementing the rural electrification programmes up to 1993-94.

In a letter giving a detailed picture of the precarious nature of its ways and means, the KSEB says that the cash outflows from the Board during the coming months would be not less than Rs. 280 crores each month.

The cost of power being purchased from outside and the cost of fuel has gone up steeply. With no improvement in the cash inflow, the deficit between inflow and outflow, excluding capital expenditure, will be to the tune of Rs. 115 crores a month. In addition to this, at least Rs. 45 crores will be required each month for capital expenditure.

The letter says that the Board's borrowing schedule for 2000-2001 is coming to a close with one more issue of Rs. 200 crores worth of non-SLR bonds.

Taking all these factors into consideration, at least Rs. 710 crores is to be mobilised during the remaining part of this financial year, even after allowing for delays in completion of the projects.

The KSEB says that, if the Government takes the stand that the subsidy of Rs. 1,300 crores for maintaining a 3 per cent rate of return is not to be paid, the Board will have to reopen its accounts for the past years and the entries for subsidies will have to be reversed.

Consequently, in place of carried forward profit, it will be carried forward losses in the accounts. The net effect of withdrawing the subsidies accounted will be that the equity of the Government will come down by Rs. 1,300 crores.

It will also permanently impair the Board's capacity to borrow, as no prudent institution will lend money to an organisation with a carried forward loss.

The letter says that, the KSEB has, internally, decided to impose a 15 per cent cut in all non-plan items of expenditure including that on purchases, administration, advertisement charges and general expenses. But these economy measures are mere drops in the ocean.

While the Board is forced to borrow to meet the deficit in revenue, it is also becoming increasingly difficult for it to draw the balances lying in the treasury accounts.

These amounts, borrowed at high interest rates, were deposited in the treasury at the insistence of the Government. Withdrawal has become impossible due to the treasury ban on all payments except salaries.

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