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G.K. Nair

Kochi , Jan.13

UNCERTAINTY persists over reopening of the smelter unit of Aditya Birla Group's Indian Aluminium Industries Ltd (Indal) at nearby Eloor as there has not been any progress in ensuring power supply at affordable rates.

The company management was permitted to purchase power from the Power Trading Corporation (PTC) by the State Electricity Regulatory Commission (SERC) in January 2004 but the company has not yet taken any steps to secure power from the PTC, Mr K.N. Gopinath, General Convenor, Save Indal Agitation Council, told Business Line on Thursday.

He said that management had been pointing out that the PTC, which had offered power at Rs 2.50 per unit earlier, had raised the tariff and that coupled with the wheeling charges of 42.5 paise per unit demanded by the KSEB was unaffordable.

He said that the State Industries Minister, Mr V.K. Ibrahim Kunju, had assured the Council that the industry department would do whatever possible to get the unit reopened. According to him, the Chief Minister is expected to convene a meeting with the ministers concerned to resolve the crisis.

According to Mr Gopinath, the KSEB should come out with some concession package enabling the company to obtain power from the PTC. He said that the unit was using 43 MW of power at Rs 3.38 per unit thus making it the major consumer paying Rs 76 crore a year to the KSEB. In addition, it was doling out Rs 35 crore towards sales tax every year. Given this situation, the Government should take the initiative to re-open the unit, he said.

Meanwhile, the Union Minister of Power, Mr P.M. Sayeed, in response to a letter written by Mr K. Chandran Pillai, MP, requesting him to convene a meeting of PTC and Indal management in connection with the supply of power to the Indal unit round the clock, said last month that "suitable instructions have been issued to the authorities concerned in the matter."

Mr Gopinath said that the extrusion plant here had been making profits and yet there has not been any effort on the part of the management to re-open the smelter unit. Instead, he alleged, the management is planning to shift this unit to Chattisgarh.

A senior company official told Business Line that the company had been negotiating with the PTC, but the price offered and the current wheeling charge was unaffordable. He said that the extrusion unit was being operated now by using billets brought from Hindalco's smelter unit in Hirakud. This involved an additional cost on transportation and yet it is found viable, as the power cost in Hirakud was much cheaper, he said. Operating the smelter unit here using high-cost power would be un-economical, he claimed.

The company management had shut down the smelter unit from August 1, 2003, and asked its 326 employees to stay at home following the expiry of concession on power charges extended to the company by the State Government in early 2003. The management had also surrendered the power supply allocation of the unit to the state electricity Board.

On a request by Indal, the PTC had agreed to supply power to the company at Rs 2.50 per unit in late 2003. But the company could not reach an agreement with the PTC at that time for want of permission from the SERC. By the time the permission was granted the PTC said to have raised the tariff on the ground that it could supply power only from the eastern grid.

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