NLC strike may result in power shortage

The Tamil Nadu government has said that if the Neyveli Lignite Corporation strike continues, the state will lose 1,378 Mw and it will have a "crippling" impact on the power availability in the state. Meanwhile, due to the strike, power generation at NLC has fallen by 400 Mw. It may be noted that from July 5, workers at NLC have been on an indefinite strike against the Centre's decision to dilute stake in the corporation.

In a letter to the Prime Minister, Tamil Nadu Chief Minister J Jayalalithaa said "one of the most emotive issues in Tamil Nadu today is the proposed disinvestment of a further 5 per cent of the Government of India's equity in NLC." The largest Navratna Public Sector Undertaking NLC is based in Tamil Nadu, and presently has more than 25,000 people and generates 2,490 Mw of power for the Southern Region, which is facing a huge power deficit.

"The proposal for disinvestment of NLC's equity has raised serious apprehensions in the minds of the workers and has led to major labour unrest. The people of Tamil Nadu are strongly in favour of preserving the public sector character of NLC," said the chief minister in her letter.

She pointed out that the justification for the disinvestment based on the so-called mandatory requirement as per the Securities Contracts (Regulation) Rules, 1957, after the amendments effected in 2010, is specious and artificially created.

To overcome this situation, she suggested two options, either buying back the shares of NLC from the public and thereafter delisting the company, or amending the relevant Rule in the SCRR, 1957, to grant a special exemption to NLC.

However, in his reply to the Chief Minister on June 8, 2013, the Prime Minister said the option of buying back the shares would send negative signals to the markets.

While pointing out that the government's decision is creating labour unrest and would impact the precarious power situation in the dtate, the chief minister said: "Tamil Nadu has been undergoing a severe power deficit which was an unpleasant legacy thrust upon the state by the previous government."

The cumulative power shortage of 4,000 Mw had to be tackled by the state and at such a critical juncture, the totally uncalled for stand of the Centre on a strategic issue of the shareholding in the NLC has forced an avoidable strike in NLC and this could have a crippling impact on the power availability in the state and undo the hard work of the present government to stabilise the power situation, said the chief minister. It may be noted, of the generation from NLC units of 2,490 Mw, the share of Tamil Nadu is 1,178 Mw. The labour unrest will result in Tamil Nadu not only losing this 1,178 Mw, but will prevent the state from drawing an additional 200 Mw because of the consequential loss of inter-state transmission capacity of power amongst the southern states.

If the unrest persists, an additional power deficit of 250 Mw may occur due to the non-availability of lignite to TAQA Independent Power Producer (IPP), a private sector lignite-based power plant at Neyveli dedicated to Tamil Nadu, which depends upon NLC for its fuel supplies. These shortages will entail additional power cuts and suffering for the people of Tamil Nadu. Not only this, the entire South will be affected by the loss of about 2,500 Mw, making the management of the Southern grid extremely difficult.

While stating, still the state government undertakings are ready to buy Centre's 5 per cent stake in NLC, the Chief Minister urged the Prime Minister to take a fresh look at the whole issue in the light of the viable suggestions which have already been made to you by me and to help avert this wholly avoidable crisis affecting the people of Tamil Nadu, said in the letter.