The Hindu Business Line : ‘Power utilisation losses cause payment defaults’

Coimbatore, Oct. 16 Southern India Mills Association (SIMA) has urged the Tamil Nadu Government to implement its suggestion of High Speed Diesel (HSD) oil model by reimbursing the cost of captive power generation for augmenting power supply in the State to ensure the survival of the textile industry that had invested over Rs 50,000 crore in the past five years.

SIMA has expressed the view that if the Government failed to come out with a positive response before October 22, the textile mills in the State would be left with no alternative other than to join the one-day closure called for by the industries in the State.

In a press statement issued on Thursday after a meeting of the managing directors of SIMA member mills, Dr K.V. Srinivasan, Chairman, SIMA, Coimbatore, said because of the extension of power cut to 9.5 hours or more every day, the mills were suffering from utilisation loss of around 45 per cent and higher, causing a serious financial crunch leading to “default of payments to the bank, inability to pay bonus to the worker on time for Diwali, not being able to procure adequate cotton during the peak season, etc.”

The mills wanted SIMA to appeal to the Government to accelerate the implementation of the diesel model and utilise idle capacity of HSD generators of over 3,500-MW available with the industry that the Government had indicated it would favourably consider to ensure the survival of the industry. SIMA was of the opinion that this was the “only immediate solution to tide over the power crisis threatening the survival of the industry”.

Though efforts made by the Government — ensuring adequate availability of diesel and exempting it from VAT for power generation — was welcome, Dr Srinivasan said the industry would not be in a position to operate the gensets and help TNEB due to the high cost of captive generation unless the HSD model was implemented. SIMA wanted the Government to accept the demand considering the investment of over Rs 50,000 crore over the last five years.

More Stories on : Power | Industry Associations | Tamil Nadu

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