The Telegraph
Since 1st March, 1999
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Power price disparity blows steel plant fuse

Burdwan, Dec. 18: At a time when the Left Front is seeing red over the single tariff pattern suggested by the West Bengal Electricity Regulatory Commission, the different rates in this district’s industrial zone has forced a mini steel plant to down shutters, leaving 200 workers jobless.

The Burdwan Iron and Steel Company Private Limited (Bisco), a showcase private project of the Left Front government in the CPM-dominated district, was set up at a cost of Rs 8 crore in Shaktigarh, a West Bengal State Electricity Board (WBSEB) zone, in 1997.

After operating for the past five years, Bisco has closed down unable to compete with plants in the Durgapur area, where Durgapur Projects Limited (DPL) and the Damodar Valley Corporation (DVC) offer electricity to industries at less than half the WBSEB’s rates.

“We have been forced to close down production as being in the WBSEB area means that we have to spend much more on power, making our steel ingots less competitive,” said Bisco owner Subhas Banik. He said the plant had run up losses of over Rs 3 crore.

“I have brought the matter to the attention of industry minister Nirupam Sen and power minister Mrinal Banerjee, but I am yet to hear from them,” Banik said.

A mini steel plant with an electric arc furnace of Bisco’s size consumes about 4.2 MW daily. Bisco runs up a bill of about Rs 58 lakh a month, payable to WBSEB.

On the other hand, a unit in Durgapur, which consumes as much as 6 MW daily, runs up a monthly bill of about Rs 37 lakh, making its steel far cheaper than that manufactured by Bisco, which has a production capacity of 75 tonnes per day.

Moreover, the subsidy provided by DPL is 48 per cent of the surcharge levied on the billed amount, whereas WBSEB’s subsidy is just 30 per cent.

Industry minister Sen said the government was aware that the plant had shut down due to anomalies in the power tariff structure. “Though I have not intervened in the matter till now, I will have a word with power minister Mrinal Banerjee and discuss ways to bring in parity in the tariff structure,” he said.

At present, with a subsidy of 30 per cent on the surcharge, WBSEB’s tariff comes to Rs 3.16 per unit consumed by a factory. DPL, however, has announced an additional subsidy of 18 per cent on the surcharge and has fixed the per unit cost at Rs 2.10. Bisco has lost out on the extra benefits being reaped by about 50 other small steel plants in the Durgapur area.

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