The Hindu Business Line : SIMA for linking fuel subsidy with actual cost

The Southern India Mills Association (SIMA) has said the Tamil Nadu Electricity Board’s move to provide fuel subsidy or purchase of power from the captive power plants available with the industry to tide over the power shortage is welcome, but insists that the board linked the fuel subsidy or the power purchase charge with the actual fuel cost.

An urgent meeting of the SIMA-member mills was held here, even while thanking the State Government and the electricity board for considering the power purchase from industrial units having captive generation and also offering fuel subsidy for own consumption, however, felt that the power purchase price of Rs 7 per unit fixed for units using furnace oil in their captive generation and also the fuel subsidy of Rs 3.50 per kwh, if the units used the power for their own consumption would make the scheme unviable, according to Dr K.V. Srinivasan, Chairman, SIMA.

Unhappy over the unscheduled load sheddings and power trippings, the SIMA has been pleading the board to come out with a declared power cut or specified power holiday in a week so as to enable the textile units in the State to plan their operation.

The textile industrial body also said the dislocation in power supply had seriously affected the productivity of the mills and caused damage to the sensitive machinery used in manufacture.

Dr Srinivasan said that the power purchase price of Rs 7 per unit or the fuel subsidy of Rs 3.50 offered by the board were not considered economical for the industrial units located in different parts of the State due to high transportation cost. The member-mills felt the need for revising the purchase price by linking the fuel cost with actual cost, including the transportation cost. The members also wanted the board to work out a suitable power purchase scheme for units using the high speed diesel oil generators for captive consumption.

In addition to these steps, the SIMA has also called for proactive measures such as exempting furnace and high speed diesel oil from value added tax, waiver of maximum demand charges and exemption of tax on captive power generation.

Dr Srinivasan suggested the board to extend the wind power banking facility beyond March 31 that will enable the mills to carry forward the surplus power to next year. These steps should be initiated by the board without losing further time as the delay in implementing the suggestions would only add to the loss of industrial productivity.

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