Ferro-alloys units in Andhra Pradesh, numbering 30, are on the brink of a deep crisis, as the various power distribution companies (discoms) in the State have sent proposals to abolish the special power tariff category for the industry and to hike power tariff by Rs 2 a unit or so on a par with other HT consumers, according to Mr R.K. Saraf, Chairman of the AP Ferro-Alloys Producers' Association.
At a press meet here on Saturday, he said 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 1.
“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 Rs 2 a unit in addition to the Rs 2.71 per unit we are paying. It will be impossible to run the units on the new tariff,” he said, and added that the association would represent the problem to the AP Electricity Regulatory Authority in the first week of February.
Mr Saraf said the loss of revenue to the discoms would only be Rs 250-300 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.
Setback to exports?
He said the ferro-alloys units in AP were earning foreign exchange of Rs 500 crore through exports, and exports would be rendered uncompetitive with the hike in power tariff.
“In fact, the only plus point for the ferro-alloys units in AP is the concessionary power tariff. Otherwise, there is no point in locating the units here.
“Nearly, Rs 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,” he complained.
Mr P.S.R. Raju, Managing Director of Deccan Ferro-alloys Pvt Ltd, said 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 Ltd, spoke in the same vein.