The high cost of power has forced several ferro alloy units in West Bengal to cut down on their production, the present capacity utilisation being around 55 to 60 per cent.
According to Mr J.K. Chatterjee, Secretary (East), Indian Ferro Alloy Producers’ Association, systematic upward revision of power tariff over the past few months by West Bengal State Electricity Distribution Company Ltd and withdrawal of subsidy which was available under the West Bengal Incentive to Power Intensive Industry Scheme spiked the cost of power supply. The subsidy scheme was introduced in May 2005 and withdrawn in March 2009.
Another hike?
According to Mr Chetan Agarwala, a member of IFAPA and Director of Modern India Con-cast Ltd., a major producer of ferro alloy in the State, WBSEDCL is believed to have approached the State Electricity Regulatory Authority for an upward revision of tariff. He feared that the proposed increased could be in the range of 30 to 40 paise a unit. Only in November, the tariff was raised by 78 paise per unit and in August by approximately 30 paise. As a result, the average tariff now is Rs 4.5 per unit.
“When the incentive scheme was introduced in 2005, the tariff was Rs 2.60 per unit which actually came to around Rs 2 per unit because of the 25 per cent subsidy available under the scheme,” he said. Interestingly, the ferro alloy units dependent on power supply from Durgapur Projects Ltd and the Damodar Valley Corporation had not been subjected to such upward revisions. DPL charges Rs 3.20 and DVC Rs 2.80 per unit.
Mr Agarwala felt that the withdrawal subsidy was unacceptable because disbursements, as per the scheme, were supposed to continue for five years to units located in backward regions of the State and for three to those in not-so-backward regions. He demanded immediate resumption of disbursements of subsidy to those units set up till March 2009.
Raw material shortage
Mr Chatterjee also drew attention to the shortage of raw materials like chrome ore and manganese ore mainly produced in Orissa. Since supplies from Orissa had become uncertain, many West Bengal based ferro alloy units were importing the raw materials.
“We know West Bengal does not produce raw materials and yet we came here to set up units lured by the availability of concessional power which is no longer available”, Mr Agarwala added. “In ferro alloy units, electricity accounts for 40 per cent of the total cost.”
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