The steep hike in power tariff has plunged the ferro alloys industry in Andhra Pradesh into a crisis and 34 units are on the brink, according to industry sources.
According to R K Saraf, Chairman of AP Ferro Alloys Association, many in the power-intensive industry set up units in the State only due to favourable power tariff. In the past three years, the power tariff has been more than doubled making operations unviable.
Power accounts for up to 70 per cent of the cost of ferro alloys like ferro manganese, ferro chrome and ferro silicone which are the major raw materials for the steel industry and 50 to 60 per cent production is exported. The high power tariff is making it unviable in the highly competitive international market.
The industry has invested close to Rs 2,000 crore and employs more than 10,000 persons directly and another 30,000 indirectly and most of these units are located in non-urban areas.
The industry representatives have appealed to the Chief Minister, N Chandrababu Naidu, who has referred the issue to a Cabinet sub-committee. They have met the members of the sub-committee – Yanamala Ramakrishnudu, Ch Ayyanna Patrudu and Pratipati Pulla Rao – and explained the problems to them.
Saraf said, “We have requested that the power be supplied at the price Transco gets from power generators with a markup for handling costs. The industry would be able to survive only if the tariff is around Rs 2.65 per unit. If the Government does not act soon all the units would have to shut down operations."
sarma.rs@thehindu.co.in