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G.K. Nair

Kochi , April 22

UNCERTAINTY over reopening Indian Aluminium Ltd's smelter unit continues, as the company management is yet to submit to the government its proposal on its power requirement and the tariff.

Even a month after the meeting held by the Chief Minister, Mr Oommen Chandy, in which he asked the management to submit a report on the company's requirement of power and the tariff at which the unit could be operated viably, it has not responded, trade union leaders said.

Mr Chandy had advised the management to take up electricity issues, such as reducing wheeling charges, with the State Electricity Regulatory Commission. In that event, it was assured that the government would recommend its demand, the trade union leaders said. Besides, it was ready to grant permission to set up captive power plants, including hydel projects.

Management sources here told Business Line on Friday that a decision has to come from the company's corporate office in Kolkata. They said that though the smelter unit had been closed, the workers were being paid for the past 20 months. The company was ready to consider reopening the unit if steps were taken to make available power at affordable rates, they added.

Following the Kerala State Electricity Board's hike in tariffs, the management downed the smelter unit's shutters in August 2003, and asked 326 workers to stay at home.

The management was 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 the rate offered was on the higher side.

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

It is understood that the electricity board was not in favour of reducing the power tariff. If it agreed to offer power at the pre-hike rate of Rs 2.90 a unit, the management would be ready to re-open the unit, trade union sources said. Otherwise, they argued, the KSEB should come out with some concession package to enable the company to obtain power from PTC.

The unit uses 43 MW of power at Rs 3.38 per unit, making it the major consumer paying Rs 76 crore a year to the KSEB. It also doles out Rs 35 crore towards sales tax every year.

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