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G K Nair

Kochi , Dec 9

INDIAN Aluminium Company Ltd (Indal) of the Aditya Birla Group is preparing to close down its Eloor-based smelter unit permanently as it has failed to get permission to draw power from the Power Trading Corporation (PTC).

The Kerala State Electricity Board (KSEB) is allegedly playing a `hide and seek game' on this matter and "it does not want us to draw power from PTC," a highly placed management source told Business Line today.

The KSEB had asked the company last month to pay Rs 1.60 per unit as transmission charges for bringing power from the Kerala border. The PTC had agreed to supply power at Rs 2.50 per unit. The company cannot pay the additional Rs 1.60 per unit as demanded by the KSEB as "it is not fair", he said.

"We cannot continue for long like this as the idle expenditure is mounting," the source said.

The Government, he said, is not taking any interest. If this situation is allowed to continue, the management would have no alternative other than closing shop, which was set up before Independence in 1943. In that event, around 1,300 people would be rendered jobless, including 800 regular workers.

At the same time, the State Government would be deprived of Rs 80 crore towards power charges and a revenue amounting to Rs 25-30 crore from various taxes per annum. The `Save Indal' Trade Union Committee alleged that the Kerala State Electricity Tariff Regulatory Commission (KSERC), which had heard the arguments of all concerned parties on September 2, could not take a decision.

As the cost of power supplied by the KSEB was higher, the company after reaching an understanding with the PTC had approached the KSERC seeking permission for drawing power from the PTC. The commission had conducted a hearing on September 2 of the parties.

The company management had shut down the smelter unit from August 1 last and asked the employees to stay at home as the concession on power charges extended to the company by the State Government had expired a few months back. It had already surrendered the power supply allocation of the unit to the State Electricity Board.

According to management sources, the company was a major consumer of power at 20 million units per month. Prior to August 2001, the company was paying Rs 4.5 crore towards power charges per month and it had increased to Rs 6.75 crore following two tariff hikes. At this rate, the unit cannot be run profitably and it has become economically unviable, they said.

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