Special cess on industry for reservoir water use mooted

The state energy department has proposed to impose a special cess on industrial water consumers for maintenance of water reservoirs. The proposal is aimed at reducing energy tariff as hydro power generators include maintenance expenditure while quoting rates for sale of electricity.

"A corpus should be created by imposing a levy on the industries drawing water from different reservoirs for the purpose of maintenance of reservoirs and water sources by making periodical dredging and removal of shoals,” energy secretary P K Jena wrote to the water resources department.

"Proper legislation should be made for controlling and distributing water among the industrial units from the reservoirs, the water from which is also utilised by the hydroelectric projects,” he added.

The idea to collect maintenance charges from industrial units came from the High Court direction last year, which, while hearing a plea against higher energy tariff, had rapped the state energy department for not taking enough steps to reduce energy production cost.

It had directed the energy department, Gridco, power distributing companies and hydro power generators to collect pending bills, saying that the huge outstanding bills were putting financial burden on the power utilities and was a key reason for tariff hike.

Based on the High Court ruling, a state government committee created for policy formulation on reservoir water use by industrial units in August this year decided that the industries will have to pay water tax and hydro-energy output loss charges separately to the Water Resources Department and Odisha Hydro Power Corporation (OHPC).

Previously, the industries were paying water taxes and energy compensation levy to the Water Resource department as per their agreement based on a policy framed in 1992.

Currently industries have to pay Rs 15,500 per million gallons of reservoir water, and Rs 19,000 for drawing water from irrigation sources like canals.

In February this year, a written reply furnished by Chief Minister Naveen Patnaik in the state assembly said 16 large industries which together owe Rs 1,422.04 crore of water dues, have not made the payments and instead, have filed 24 cases in the High Court.

In total, 251 industries, including big corporate houses like National Aluminium Company (Nalco), Tata Steel and Paradeep Port Trust (PPT), owe Rs 1,634.71 crore (as on September 2011) to the government by way of water cess.

Hydro power production currently comprises about 20 per cent of total 2,500 Mw power generation of the state.