BL reported that ferroalloys units in Andhra Pradesh, numbering 30, are on the brink of a deep crisis, as the various power distribution companies in the state have sent proposals to abolish the special power tariff category for the industry and to hike power tariff by INR 2 a unit or so on a par with other HT consumers.
Mr RK Saraf chairman of the AP Ferro Alloys Producers' Association said that the association had passed a resolution urging the State Government to reconsider the move as the 30 units would be left with no option but to down shutters, if the new tariff comes into effect from April 1st 2012.
He added that "Ferro alloys is a power intensive industry and therefore, a special tariff category has been created for the industry and now the discoms have proposed that the category be abolished and the units be treated on a par with other HT consumers. It will mean on the aggregate a hike of INR 2 a unit in addition to the INR 2.71 per unit we are paying. It will be impossible to run the units on the new tariff."
He added that the association would represent the problem to the AP Electricity Regulatory Authority in the first week of February 2012.
Mr Saraf said that the loss of revenue to the discoms would only be INR 250 to INR 300 crore, if the government concedes the industry's demand, but it would be ten times more if the tariff hike proposal is implemented and the 30 units down shutters. Nearly 50,000 persons are dependent on the industry directly or indirectly.
He said a similar situation had been faced by the industry in 2002 and after prolonged agitation the then TDP Government had conceded the demand of the industry.
He said the ferroalloys units in AP were earning foreign exchange of INR 500 crore through exports, and exports would be rendered uncompetitive with the hike in power tariff. He added that "In fact, the only plus point for the ferroalloys units in AP is the concessionary power tariff. Otherwise, there is no point in locating the units here. Nearly, INR 5,000 crore of investment has come into the sector in the State in the recent past, and now suddenly the Government has changed its policy. The new units cannot start functioning."
Mr PSR Raju MD of Deccan Ferroalloys Pvt Limited said that the industry was facing so many other problems such as raw material scarcity and power tariff hike would simply kill it. Mr Sistla Sesha Sai of GSN Ferro Alloys Pvt Limited, spoke in the same vein.
(Sourced from www.thehindubusinessline.com)
