Financial Daily from THE HINDU group of publications
Friday, Aug 30, 2002
Industry & Economy
Kerala industry decries power tariff hike
KOCHI, Aug 29
THE power tariff hike slapped on the industry, which is already overburdened with high power costs, might lead to the closure of several units, especially the power-intensive ones, in Kerala.
Some of the major EHT consumer units are Indian Aluminium, Binani Zinc, Carborundum Universal Ltd and the State-owned Travancore Cochin Chemicals Ltd (TCC).
With the hike, effective from Thursday, the cost of production is expected to rise in units where power is the major raw material, industry sources said.
During the last increase in tariff in August 2001, the Government assured the HT/EHT consumers that they would be given some incentives later. But instead of any such intensive, the tariff has been raised further, they said.
If no concessions are given to Indian Aluminium (Indal), the company would be compelled to close its smelter unit, according to Mr Gopinath, trade union leader and general convenor of the Aikya Trade Union Standing Council.
The company has been representing to the State Government for the incentives but no action was taken, he told Business Line.
According to him, NTPC had agreed to provide power at Rs 1.82 per unit to Indal through its grid but required the clearance from KSEB. In Orissa, Indal is being supplied power at the same rate.Other State Governments are also providing power to power-intensive units with 15 per cent direct incentive, he added.
The unit here needs 20 million units of power and with the hike, the cost of power would go up to Rs 6.5 crore from Rs 5.5 crore.
The company had put forward three options to the Government to meet its power requirements at a moderate rate. But none of them have been accepted so far. The proposals included setting up of a captive thermal power plant.
The statement often made that power in Kerala is cheap is not correct, Mr N Mohan, President, Binani Zinc Ltd, said.
"Power is available to industries in other parts of the country and abroad at much lower cost. Even in China, power supplied to the industries is at Rs. 1.80 (equivalent) per unit."Slapping of thermal surcharge would raise the power charges to Rs 3.40 per unit.
The zinc industry is already facing serious problems because of the slump in the market the world over.
The protection given to this industry by the Government has also been brought down from 35 per cent to 25 per cent. In addition, the import of the raw material zinc concentrate attracts an effective duty of 5-10 per cent. All these factors have raised the cost of production significantly.
Thus, the unit has been facing serious financial problems in recent years and the hike in power tariff at this juncture would only aggravate the situation, he said.
According to other industry sources, instead of raising the tariff, KSEB should have taken serious steps to arrest theft, and effectively and regularly collect charges and arrears from all consumers including Government departments, offices and PSUs.
Besides, it should bring down establishment costs, they added. With the increase, the power consumption by the HT and EHT consumers would drop significantly, and that might adversely affect the board's revenue.
Send this article to Friends by E-Mail
Stories in this Section
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |
Copyright © 2002, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line