350 steel units in TS face closure

Even as the Telangana government claims that a number of new industries are coming up in the state, hundreds of industries in the small scale sector, particularly the steel sector, are in various stages of shutting down.

About 350 steel units in the small scale sector have either closed down or cut production rendering thousands jobless.

The steel units have shut shop because of the high cost of power and coal in TS, and are importing material from Chhattisgarh.

Power costs `7.20 per unit in TS, whereas with the Chhattisgarh government providing subsidy of `2 per unit, power costs around `4 per unit there.

A senior official of TSSPDCL said that high cost of power has reduced consumption in TS.

Some industries have disconnected their power supply and some are paying minimum power bill. In Chhattisgarh, on the other hand, the government is providing power subsidy to the steel industry.

Moreover, in Chhattisgarh, coal is available locally for steel units while in TS steel units have to import the coal.

TS has about 300-350 steel units, mostly located around Hyderabad city.

S. Ravi Sekhar, a representative of the TS steel industry, said that if the state purchases cheaper power from the open access system, it would be collecting cross subsidy, wheeling charges and others. After paying all these charges, the cost of power per unit purchased in the open access system is more or less equal to the power tariff set by the power utilities.

He also said that in Chhattisgarh, Odisha, and Madhya Pradesh, power is cheaper at night when the demand is less. But in TS, there is no difference in the daytime and night-time tariff.