Gujarat: PGVCL ‘powerless’ against cash-strapped civic bodies

RAJKOT: State-run power distribution company, Paschim Gujarat Vij Company Ltd (PGVCL), has been caught in a catch 22 situation with 66 municipalities in Saurashtra yet to pay their total pending dues amounting to Rs 415 crore for the past five years.
PGVCL can’t snap power connections as it would affect water supply to homes. The recoveries are pending despite several notices and warnings.
When contacted, KS Malkan, general manager (accounts) at PGVCL said, “We can’t disconnect the power supply of water works and street lights because a larger public interest is involved.”
Moreover, stringent actions don’t go down well with people’s representatives too and PGVCL is left with the only option of seeking government help. In 2014, a settlement was done where the Gujarat Municipal Finance Board and the urban development department paid the outstanding principal amount while PGVCL waived off the interest.
Senior officials said that the burden of this outstanding amount falls on the honest residential and industrial consumers in the form of increase in tariff. PGVCL needs to raise money from the market for its day to day functioning and development projects and the outstanding amount increases its concurrent and recurring fund cost.
Municipalities, however, say they are cash-strapped.
Girish Sariya, in-charge chief officer of Savarkundla civic body said, “The cost of providing water is high because we have to fetch groundwater and distribute it. We need more manpower and our maintenance cost is high. We don’t have sufficient funds to pay the water works bill as the income of the municipality has shrunk. Last year, we could recover only 49% of property tax.”
Jigar Patel, chief officer of Anjar municipality in Kutch, said “We don’t have sufficient funds to pay the bills. The government grant is given for specific projects only. PGVCL considers municipalities as urban consumers and they charge us more than rural consumers. Since we don't do any business out of it, we should be provided electricity at the subsidised rate.”
Patel said, “The municipality should also increase its own sources of income and those government departments which delay in paying property tax to the municipality should also pay on time so that we can maintain our own sufficient funds.”