Industry in Punjab is gearing up to meet the weekly power cut across the state that became effective from Sunday. With the cost of captive power ranging between two to three times (depending upon the scale of operation) that of normal rates, running on full capacity has become unviable for most of the industrial houses.
The steel cluster at Mandi Gobindgarh with close to one thousand small and medium scale units registered a complete shut down on the weekly power cut (for two days) as the huge power requirement of steel furnaces cannot be met through generator sets.
The Managing Director of Bhawani Industries Limited at Mandi Gobindgarh, J P Goyal told Business Standard that the industry in Punjab was provided with the option of open access under the open access scheme of the central government some two years ago. Hence, there was no power shortage for industry for two years.
Three months back, the Punjab government imposed a Rs 1.6 per unit charges on the power arranged under the open access scheme. This has discouraged the industry to purchase power from sources other than state utilities. As the state utilities has a deficit of power in pre-monsoon season, Goyal said the industries have to cut down their production by 25 to 30 per cent.
It also results in fluctuations in steel prices as the increase in cost is passed on to the consumers.
The labourers suffer the most in such a situation as over 50 per cent of the shop floor manpower in steel industry are on daily wages.
The textile industry in Punjab, on the other hand is running on full capacities on captive power. J L Sharma, the managing director of Vardhman Yarns & Threads told that the captive power costs more than double of the power provided by the state utilities but running below capacity incurs the fixed costs and again becomes unviable.
Speaking to this newspaper, President, Northern Chamber of Small and Medium Industries, Sharad Aggarwal said, “Already,the hand tool industry is suffering a 40 per cent drop in orders due to Euro zone crisis. Further, Egypt, Syria and Libya used to be major markets for hand tool industry, but the recent unrest has affected the export orders. The shortage of power cut is affecting orders. We can’t sustain on generators as its operating cost is about Rs 12-13 per unit.” Generally, the hand tool industry in Jalandhar contributes Rs 2 crore as turnover every day and the exporters fear they might lose foreign revenue.
“The shortage of power in the state has come as a double whammy for the industry. Already, the slowdown has affected us to the extent of 50 per cent and due to power shortage we can’t even deliver our orders in time. We are afraid if such a situation persists in near future, we might lose whatever orders is in our hands,” said Munish Chopra, Director, Jalandhar-based Chopra Synthetic Rubber Udyog.
With about 1,000 units, Punjab has the highest per capita consumption of power in the country as compared to the national average of 750 units. Against the state’s total power generation capacity of 6,200 Megawatt (Mw), the present demand in the state is of 9,000 Mw. Moreover, power shortage in the state is growing at the rate of 10 per cent per annum.