West Bengal steel makers for ending power tariff hikes

July 23rd, 2010 - 12:34 am ICT by IANS  

Kolkata, July 22 (IANS) Ferro-alloy and steel manufacturers in West Bengal Thursday said the sector was on the verge of closure following repeated power tariff hikes by the state-run utilities and demanded a halt to this.
The manufacturers also demanded reinstatement of an old incentive scheme which, they alleged, the state government has suddenly discontinued.

“In recent times, this sector has been confronted by a critical problem - that of repeated increase in power tariff. For all there power intensive industries, hike in power tariff will only worsen the situation,” Indian Ferro Alloys Producers’ Association (IFAPA) eastern chapter secretary J.K. Chatterjee told media persons here.

Giving statistics, Chatterjee said as 1,000 units of power are consumed per ton of steel produced and if there is an increase of Rs.1 per unit, the cost per ton of steel goes up by around Rs.1,000.

The West Bengal State Electricity Distribution Company Limited (WBSEDCL) increased power tariff by 30 paise per unit in August last year and by a further 78 paise in November.

“Another petition has been made by the WBSEDCL before the West Bengal Electricity Regulatory Commission for increasing the tariff again retrospectively from April 1,” Chatterjee said.

While the average consumer price charged by WBSEDCL is Rs 4.50 per unit, the DVC charges Rs 2.80 and Durgapur Projects Limited Rs 3.20.

West Bengal is the country’s leader in ferro-alloy production and 30 percent of the units in the country are located in the state.

The state produces 7 lakh tonnes of ferro-alloy from its 30 units, 25 of which are feeling the heat due to power increase by state-run utilities like WBSEDCL.

Another ferro alloy manufacturer, Chetan Aggarwala alleged that the hike in tariff was largely due to inefficiency of the power plants. “One reason is the low plat load factor. While the state-run power plants have a PLF of 67-68 percent, private sector utilities have a much higher PLF at above 90 percent,” he added.

“Due to intense competition across the country and abroad, we have to sell our products at the same price as the units in other states like Orissa where power tariff is considerably lower. So we have become uncompetitive,” Aggarwala said.

“Electricity consumption accounts for 40 percent of the cost of production of ferro alloy and steel melting units. As such this industry in the state is in the red and on the verge of closure,” he said.

On the incentive scheme, Chatterjee claimed the state government should continue the West Bengal Incentive to Power Intensive Industries Scheme, 2005 (WBIPS2005).

Many of the industrial units are located in backward districts of the state, and several of them had taken up expansion of their units at “huge cost”. “The scrapping of WBIPS 2005 at this juncture will put the industries located in backward districts of the state in a disadvantageous position forcing them to cut down production,” he said.

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