Steel and sponge iron units demand rationalisation of power tariff

The small and medium sized steel plants and the sponge iron units in Orissa, currently grappling with the problem of steep prices of raw materials, have called for rationalization of the power tariff. They have demanded that the power tariff for these industrial users be reduced by half.

Addressing media persons here, P L Kandoi, president of the All Orissa Steel Federation said, “The power tariff for the industrial users which now stands at Rs 3.75 paise per unit is going to be raised to Rs 4.25 paise per unit from April 1 this year. The state government is going for an abnormal hike in power tariff and the units are not in a position to operate at such a high tariff. Our demand is that the power tariff should be reduced by half. The Madhya Pradesh government has brought down the power tariff for industries to Rs 1.55 per unit and there is no reason why the Orissa government cannot do the same.”

The All Orissa Steel Federation has also pointed out that the water tariff, which has been increased by 30 times recently by the state government, is also unbearable for these units. To make matters worse, the water cess is payable even if the plant is closed or water is partly used.

The federation is also sore over the exorbitant costs of ore transportation in the state.

"The ore transportation cost in Orissa is much higher compared to other states. For example, the cost of transportation of ore from Keonjhar to Kalinga Nagar is Rs 1100 per tonne while from Daitari to Paradeep is Rs 1500 per tonne. The state government should ensure that there is no exploitation in logistics cost”, Kandoi added.

Another area of concern is the inadequate availability of raw materials and the steep hike in prices of iron ore and chrome ore.

The units don't receive even 50 per cent of the raw materials, Kandoi said, adding, the state government has not kept its promise of making the raw materials available to the units at affordable.