In a powerless Tamil Nadu industries suffer heavy losses

The various forms of power cuts that the Tamil Nadu government has enforced in the state, to stay afloat during one of the worst power crisis it has ever faced, have hit industries very hard.

The severity of the economic impact can be gauged from the fact that on a power holiday, the industries in Coimbatore district in western Tamil Nadu alone reportedly lose Rs 900 crore. Textile industries in the state are losing about Rs 300 crore a day while the leather industry, which account for a lion’s share of the state’s export and already reeling under the Eurozone crisis, are also severely hit.

 In a powerless Tamil Nadu industries suffer heavy losses

Tamil Nadu industry has been lossing hundreds of crores daily due to the power holidays and power cuts. Reuters

The losses are due to the fall in production due to power holidays and other restrictions, and escalating costs due to the use of diesel generators. Already impacted by export market shocks, the textiles and leather industries couldn’t have expected a double whammy worse than this.

The state is implementing three types of R&C (restriction and control) measures to reduce a demand-supply gap of 4,000 MW of electricity since any partial augmentation of power generation is unlikely to happen before June. For industries, the state has declared weekly power holidays on two days and restrictions on buying power from third party producers, while for regular users it cuts power from two to fours hours every day. However, reports from outside Chennai show the power cuts there last eight hours or longer.

Across the board, the state has cut power supply by a drastic 40 percent.

However, the power holidays that came into force on 1 March hasn’t resulted in any tangible relief. As against a proposed saving of 800 MW, the state is saving only 250-300 MW.  Experts say that this is mainly because some industries are allegedly drawing power from the grid despite the power holidays. Since the state doesn’t have separate feeders for the industries, they continue to draw power even such holidays. The erring industrial units prefer illegally drawing power than using generators because the fine works cheaper for them.

Although the power holiday was a demand from the industries so that they could plan their operations, including shutting down plants and sending workers on leave, it hasn’t worked in their favour. Despite two days without electricity, they are not immune to the daily power cuts which last between four to eight hours. In effect, industry bodies say that there is absolutely no guarantee on the supply of electricity and they cannot work in such totally unpredictable conditions.

Protesting against the power cuts in addition to the power holidays, the Tamil Nadu Association of Cottage and Micro Enterprises (TACT) organised a three-day fast in Coimbatore. According to Southern India Mills’ Association (SIMA), which opposed the concept of power holidays, about 5000 units have been closed down.

Industry bodies such as the Tirupur Exporters’ Association (TEA), have asked the government to change the power holidays from Fridays and Sundays to weekends so that outstation workers can go on leave.

The small and medium industries in Coimbatore; where about 40,000 such units including foundry, pump and motor makers and textile mills are in operation are among the worst affected. The Coimbatore District Small Industries Association said it had demanded power holiday to enable them get power for the rest of the week. However, the regular  daily power cuts have made matters worse. SIMA also said that the power holidays were not working because only some genuine industries were abiding by the restrictions.  According to the association, the textile mills in the state are getting only eight days of power in a month.

Besides the power holidays and scheduled and unscheduled power cuts, another big blow for the industries in the state was the government order preventing them from buying power from third party producers. On writ petitions from some industries, the high court has, however, set aside it's order.

Meanwhile, reports indicate a 12 per cent hike in diesel consumption in the state. Diesel is the only option for the industries to maintain operations although it escalates costs by 8-10 per cent.

It’s not the industries that are suffering. With a minimum of eight-hour power cuts, for residents outside Chennai normal

There are no obvious solutions visible to Tamil Nadu's electricity woes.AP

life is a complete mess. The worst affected are the school students in standard twelve who are appearing for their annual board exams. Although Chief Minister Jayalalithaa has said that schools can hire generators and the state government would pay for them, reports show that the market doesn’t have appropriate generators in sufficient numbers. Children appearing for examination are sweating it out in candle lights both at home and examination halls.

A solution is nowhere in sight. The government hopes to get an additional 1800 MW by June when a couple of projects under construction become operational, but it will still be short by 2200 MW. If the government agrees for the commissioning of the Kudankulam nuclear power plan (KKNPP) after the Sankarankoil bye-election, it could bring an additional 1000 MW as promised by the centre. Still, it will need an additional 1200 MW. The government has laid out plans to ramp up production, but it will take a few years for completion.

Experts say that supply restrictions alone will not work in such situations. In an article in the Hindu, former chairman of Haryana Electricity Board, MG Devasahayam said a careful categorisation of consumers and better supply management can make a difference.

“Some of the direct benefits identified were: assured supply of power, equitable distribution of power, system discipline, improvement in quality of power, reduction in system losses, streamlined control of power distribution, impact on the performance of regional grid, higher consumer satisfaction and economic efficiency and improved generation due to disciplined distribution system,” he said in his column.

“The Haryana model of NBEM, if refined considerably and reworked to suit Tamil Nadu's requirements, can be effectively implemented, given strong political will. This would result in supply of consistent and good quality of power that could satisfy the actual needs of all segments of power consumers,” Devasahayam said.

Updated Date: Mar 09, 2012 15:31:04 IST