Exporters shy away from State grid

Exporters shy away from State grid
Subhash Chandra N S, Bangalore, DH News Service:
The economic slowdown has indeed hit the export industries such as garments and machinery tools with many of them reducing three shifts to just one.

Hit by poor power supply and unscheduled load shedding by the Bangalore Electricity Supply Company (Bescom), over 1,000 export units in the City have opted for captive power instead of relying on the State grid to meet their commitments.

The economic slowdown has indeed hit the export industries such as garments and machinery tools with many of them reducing three shifts to just one. This had earlier reduced the consumption by at least 25 per cent. But the poor power supply by BESCOM has now forced them to get completely out of the State grid.

Unpredictable power

Most of these sectors like machine tools manufacturers, heat treatment industries, forging shops which require power continuously were brought to the State grid by BESCOM in 2003 by offering incentives. But now they have gone back. “There are over 1200 industries which have export commitment and they are now thriving on captive power, the power supply has become unpredictable,” said Jacob Crasta, Senior Vice President, Federation of Karnataka Chamber of Commerce and Industries.

“All these industries, since the early 90s, were thriving on diesel for power. At that time, the commercial power was available at Rs 3.50 per unit, when it was still Karnataka Electricity Board (KEB) before the formation of ESCOMS. But after the birth of ESCOMS in 2000, uninterrupted power was promised, and since the diesel price started rising many came into the State grid, “ explained Crasta.

If the recession crippled the industry, the power crisis is killing it. Though the Government announced sops to bail out the automobile industry and the industries that depend on the auto sector, Crasta felt it would only help in the short term.

“But unfortunately, the scheme which made BESCOM a profitable company, was short lived and most of the industries have been suffering,” said another industrial.

“The HT industries have been cautious always and never gave up captive power. But those entrepreneurs who returned to the grid are now the worst hit as the diesel price is not favourable to Industries,” he said.

Industries such as Computer controlled lathes, foundaries, garments, machine tool industries have reduced their power consumption by about 70 percent. “The decline started in 2006. The situation would never have arisen had the Government inked a power purchase agreement (PPA) with private power generators or if the government then had taken steps for capacity addition,” noted Crasta.