Financial Daily from THE HINDU group of publications
Friday, Feb 25, 2005
`Power crisis' keeps Indal unit in limbo
G. K. Nair
Kochi , Feb. 24
THE stalemate in the reopening of the smelter unit of the Aditya Birla Group's Indian Aluminium Industries Ltd (Indal) at nearby Eloor still continues, as no solution has emerged to resolve the issue of power supply to the unit.
As the unit has remained closed for over 19 months , the Save Indal Agitation Council (SIAC) would be seeking the immediate intervention of the Chief Minister, a trade union leader told Business Line.
He said that the Chief Minister would be requested to initiate steps to convene a meeting of the company management and the Power Trading Corporation (PTC) to find a solution acceptable to both the parties so that the unit could draw power from the Southern grid.
The Union Minister of Power, Mr P. M. Sayeed, in response to a letter written by Mr K. Chandran Pillai, MP, requesting the minister to convene a meeting of PTC and Indal management has said that "suitable instructions have been issued to the concerned authorities in the matter." However, nothing has emerged so far, he alleged.
The company management was permitted to purchase power from the Power Trading Corporation (PTC) by the State Electricity Regulatory Commission (SERC) in January 2004 and yet, the company has not taken any steps to secure power from the PTC, he said.
According to him, the management had been pointing out that the PTC, which had offered power at Rs 2.50 per unit earlier, had raised the tariff and that coupled with the wheeling charges of 42.5 paise per unit demanded by the KSEB was un-affordable.
The KSEB should come out with some concession package enabling the company to obtain power from the PTC. He said that the unit was using 43 mega-watts of power at Rs 3.38 per unit, thus making it the major consumer paying Rs 76 crore a year to the KSEB.
It was also doling out Rs 35 crore towards sales tax every year. Given this situation, the Government should take the initiative to re-open the unit, he said.
Some of the workers said that the extrusion plant here had been making profits and yet, there has not been any effort on the part of the management to re-open the smelter unit. They also alleged that difference of opinion among the major trade unions was also responsible for perpetuating the current stalemate.
When contacted, a senior source at the company said that there had been no progress in the matter so far. However, he maintained, the company had been negotiating with the PTC, but the price offered and the current wheeling charge are unaffordable.
He said that the extrusion plant here is being operated now by using billets brought from Hindalco's smelter unit in Hirakud in Orissa.
Though it involves an additional cost on transportation, the current operation is found to be viable, as the power cost in Hirakud is much cheaper, he said. Operating the smelter unit here through high cost power would be un-economical, he claimed.
The company management had shut down the smelter unit from August 1, 2003, and asked its 326 employees to stay at home, following the expiry of concession on power charges extended to the company by the State Government in early 2003.
On a request by Indal, the PTC had agreed to supply power to the company at Rs 2.50 per unit in late 2003. But the company could not reach an agreement with the PTC at that time for want of permission from the SERC.
By the time the permission was granted, the PTC was said to have raised the tariff on the grounds that it could supply power only from the Eastern grid.
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