SIMA suggests win-win power crisis solution for TANGEDCO, HT industries

21 Nov '11

5 min read

The textile industry is undergoing a grave crisis due to both internal and external factors such as global market slow down, particularly in EU and US, unprecedented volatility in cotton and yarn prices etc. The industry has lost over Rs.15,000 crores in just six months and almost all the mills across the Nation particularly Tamilnadu are currently operating under huge cash losses.

The Tamilnadu textile industry, which accounts for 1/3rd of the country's textile business size, fetching over Rs.50,000 crores export earnings, providing direct employment to over 50 lakh rural masses is the worst affected due to the State specific issues like 50% power shortage and pollution. Textile industry is the single largest consumer of TANGEDCO, accounting 27% of the power consumed in the State.

The predominantly cotton based textile industry in Tamilnadu has been facing severe power shortage for the last few years and presently it faces 50% shortage. In order to tide over the shortage, at the request of the industry, the Electricity Board earlier arranged for reliability power by sourcing the same from third parties and supplied to the industry at higher cost.

However, this lasted for only two months in a period of two year power crisis due to power shortage in the sourcing areas / companies and also an abrupt increase in domestic and agriculture sectors' demand.

Against this background, the textile mills in Tamilnadu have decided to purchase power from third parties/ power exchanges under open access during peak hours to run the mills. Unfortunately, the TANGEDCO effect load shedding during these hours. As a result, it is not only affecting the productivity in the textile mills, but also the mills are unable to fully utilize the high cost power purchased by them, besides the mills have been forced to pay penalty for violation of maximum demand, as TANGEDCO is raising bills based on the energy consumption.

In a Press Release issued here, Mr.S.Dinakaran, Chairman, The Southern India Mills' Association (SIMA) has appealed to the Hon'ble Chief Minister of Tamilnadu to immediately plan and segregate the industry feeder from the rest so as to enable the HT industries to source uninterrupted power from the private parties and power exchanges.

Mr.Dinakaran said that this strategy would create win-win situation both for the TANGEDCO and the HT industries. SIMA Chairman has pointed out that another bottleneck in getting the smooth supply of power is the inadequate Southern grid capacity (corridor problem).

To overcome this problem, Mr.Dinakaran has appealed to all the Chief Ministers of Southern States to discuss the issue and find a solution on a war footing to strengthen the Southern grid and integrate the same with the National grid.

Mr.Dinakaran has stated that this strategy alone can ensure a sustained growth rate in all the four Southern States enabling the State power supply companies and HT industries to source power in a cost effective manner without any interruption and also enable the States and the power producing companies to export the surplus to the other States and sustain the profitability level and growth.

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