The Hindu Business Line : Kerala CM calls meeting on Indal smelter unit

IN a bid to reopen Indian Aluminium Industries Ltd's smelter unit, which has remained closed for the past 19 months at nearby Eloor, the Chief Minister, Mr Oommen Chandy, has convened a meeting of all the parties involved in Thiruvananthapuram on March 14.

Indal's smelter unit was shut down for want of power at a price that the company felt could make the unit's operations viable.

Among those expected to attend the meeting are the ministers of electricity, industries and the Opposition leader, Mr V.S. Achuthanandan; Members of Parliament Dr Sebastian Paul and Mr K. Chandran Pillai; MLAs Mr K. Babu and Mr K. Mohammedali, the State power secretary and representatives of the management, KSEB and Power Trading Corporation, according to Mr K.N. Gopinath, General Convenor of the Save Indal Trade Union Samithi. Following the hike in power tariff by the KSEB, the management had downed the smelter unit's shutters from August 1, 2003, and asked 326 workers to stay at home.

It was later permitted to purchase power from Power Trading Corporation (PTC) by the State Electricity Regulatory Commission (SERC) in January 2004 but the unit did not take power from PTC, saying its rate was on the higher side, Mr Gopinath claimed.

The management had pointed out that PTC, which had offered power at Rs 2.50 a unit earlier, had raised the tariff later and, coupled with the wheeling charges of 42.5 paise a unit, demanded by the KSEB, it was unaffordable. Mr Gopinath said the KSEB needs to come out with a concession package enabling the company to obtain power from PTC.

He said the unit was using 43 MW of power at Rs 3.38 a unit, making it the KSEB's major consumer contributing Rs 76 crore a year to the board. It was doling out Rs 35 crore towards sales tax every year. Given this situation, the government should take the initiative to reopen the unit, he added.

The extrusion plant here had been making profits and yet there has not been any effort on the part of the management to reopen the smelter unit. Instead, he alleged, the management was planning to shift the unit to Chhattisgarh.

When contacted, a senior source at the company told Business Line that the company had been negotiating with PTC, but the price offered and the current wheeling charge were unaffordable. He said 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 uneconomical, he claimed.

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