Power tariff burden forces AP’s ferro alloy units to close shop

Visakhapatnam Ferro alloys industries across Andhra Pradesh have started folding up their operations after their repeated pleas to reconsider their decision to maintain status quo on levying of power tariff fell on deaf ears.

Of 39 small, medium and large units with a combined production capacity of 840 MVA providing direct employment to an estimated 30,000 employees, nine including a big unit in North Andhra have already shut down their operations. The industry also provides livelihood to 50,000 workers indirectly. It also creates employment to many in dolomite, quartz, limestone and manganese ore mines which are dependent on its future. Power is the main raw material of the ferro alloys industry, which provides its finished products to the steel industry-- almost half of its production to the overseas market.

The industry sources said while the government harps on the claim that there is no power tariff hike as they continue to collect only Rs 4.95 per unit, AP Ferro Alloys Producers’ Association sources told Bizz Buzz that the authorities have started collecting true-up charges for power consumed during 2014-19 and imposed Fuel Purchase and Power Cost Adjustment (FPPCA) from April 1, 2023 increasing the actual cost per unit to Rs 8.58 per unit.

A senior official of a ferro alloys company said on condition of anonymity that they contribute a foreign exchange earning of Rs 5,000 crore with a power bill to the tune of Rs 3,000 crore per annum and Rs 1,000 crore towards GST.

Demanding rollback of increase in power tariff forcing the ferroalloys units to down their shutters rendering thousands to go jobless directly and indirectly, CITU State general secretary Ch Narsinga Rao said on Friday that they have chalked out an action plan with ‘Challo Assembly’ protests all over the State on August 7 culminating into a huge demonstration at Vijayawada. The date for protest in Vijayawada will coincide with the budget session of the Assembly.