AP Inc fumes at tariff hike

AP Inc fumes at tariff hike

Lambasts state government for imposing 'free power' burden on industry Hyderabad: Pointing out that industrial sector in the State was already on...

Lambasts state government for imposing 'free power' burden on industry pressHyderabad: Pointing out that industrial sector in the State was already on deathbed on account of prolonged power cuts, industrialists on Monday claimed that the hefty power tariff hike cleared by APERC two days ago would drive the final nail in the crucial sector's coffin. According to them, the power tariff increase for industries ranges from 24 per cent to 60 per cent and the average hike, being around 30 per cent, will be a huge burden across the sectors. "This hike is not fair. It will impose huge burden on the industry which has already been reeling under power shortage for the past 18 months. In the past three years, the power charges for industry have double from `3.5 a unit to `7 now which is the highest in the country," Devendra Surana, President, Fapcci, told media here on Monday. He further explained that in addition to hike in power tariffs, the demand charges were increased by 40 per cent this time 'which is totally unacceptable'. Surana pointed out that had the state government foot the entire bill for free power being supplied to the agriculture sector, there would be no need for the hike. "The total cost of the free power for the financial year 2013-14 is projected to be around A Rs 14,866 crore, while the government has allocated just A Rs 5,884 crore. The remaining amount is being extracted from the industrial sector," he said. According to him, over 6000 industrial units have been classified as NPAs on account of power crisis and close to two lakh people have lost their jobs. "As a result, the manufacturing component in GSDP has come down to less than 10 per cent, the lowest in the country. It was 11 per cent a year ago, against the national average of 16 per cent and 27 per cent in Gujarat," he maintained. MV Rajeshwara Rao, Secretary General, Fapcci, blamed lopsided policies of the government for the power crisis and tariff hikes. "We will take a delegation to Chief Minister N Kiran Kumar Reddy and explained him about the ill-effects of the hike," he said. J Nageshwara Rao, President, Fapsia, alleged that Andhra Pradesh Electricity Regulatory Commission (APERC) had become a tool in the hands of the state government. He questioned why financial burden on account of free electricity supply to the agriculture sector was being passed on to the industry through the power tariff hike and FSAs. According to him, industrial production had come down by almost 45 per cent in the SMEs on account of power cuts and many companies were not in a position to execute clients' orders. "Over 40 per cent of employees have Pointing out that steel industry in the State was being supplied just 35 per cent power, Suresh Kumar Singhal, Chairman, South Central Region, All India Furnaces Association, and owner of Vijaya Foundry said Discoms had been imposing hefty penalties on the industries and the hike added additional burden. "The power tariff hike will render our products uncompetitive compared to those from other states and we will be out of business," he said. My company has already been forced to cough up Rs 20 crore in the form of FSAs, he lamented. Narsinga Rao, President, Medak Small Scale Industries Association, lamented that many SMEs were already on the verge of bankruptcy and this hike would hasten their closure. "Though the Chief Minister had made a promise at recent meeting that power problems would be over by December this year, but I don't think many industrial units will be able to survive till then. We will sell our industries and come on to the road," he maintained.
Cement industry in trouble
Hyderabad: Cement manufacturing sector, which is already in trouble on account of fall in demand and power shortages, has received another jolt in the form of power tariff hike, according to industry insiders. "This is a huge blow for us. We used to pay `4 crore as power charges every month. With the hike, our bill will go up by almost `1.25 cr, which is equal to our total salary bill," K B V Murthy, Vice President (Technical), NCL Industries Limited, said. Murthy also found fault with the state government for not allowing industries to set up captive generation units. "We are not allowed to set up captive power plants even though there is power shortage in the state. We don't understand the logic," he said.
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