M A I N   N E W S

200 steel furnaces in Punjab strike work to protest enhanced billing
Ruchika M Khanna/TNS

Chandigarh, May 16
Over 200 steel furnaces in Punjab have gone on an indefinite strike in protest against the enhanced billing charges being imposed on them by the Punjab State Power Corporation Limited (PSPCL). The strike is bound to have wide ramifications for the already staggering industry in the state.

The long, flat and special steel being produced by the these furnaces, located mostly in Ludhiana and Mandi Gobindgarh, is used as raw material in forging, fastener, light engineering (bicycle, sewing machine) and automobile industry, besides construction business. These furnaces supply raw material to the industry across North India. Though the consuming industry may not be hit immediately, the problem, if not sorted out immediately, will bring the industrial activity in the region to a grinding halt.

The immediate provocation for the furnace industry to go on strike is the decision of the PSPCL to increase billing charges for the industry by Re 1 per unit.

As compared to billing charges of 27 paisa per unit being imposed on the industry, the Punjab State Electricity Regulatory Commission (PSERC), in its order dated May 4, increased these charges to Rs 1.27 per unit.

“Power is the basic raw material for steel furnaces. Since the state does not have enough power, most furnaces buy power from other sources under the open access policy. While buying power from other sources, we could bid for and get power at the rate of Rs 3 per unit. But with the enhanced billing charges, we will have to pay much more to buy power from independent power producers. This will make buying power from outside unviable for us,” said Mahinder Pal Gupta, president of the Mandi Gobindgarh Induction Furnace Association.

Industrialists rue that the latest order of increasing the billing charges will ensure that they are left with no option but to buy power from the PSPCL. “There are 300 industrial units in the state that purchase power from power producers other than PSPCL. These units purchase power worth Rs 200 crore under the open access policy and worth Rs 300 crore from the PSPCL every month. By increasing the billing charges, buying power through open access will become unviable and everyone will have no option but to purchase power from the PSPCL,” said another steel induction furnace owner in Mandi Gobindgarh.

Representatives of the steel furnace industry met Chief Minister Parkash Singh Badal and Deputy Chief Minister Sukhbir Singh Badal. The duo reportedly said the matter was with the PSERC, which was an independent body. They assured that they would see how they could help the furnace owners. The furnace owners were now proposing to file a review petition before the PSERC, against the increase in billing charges.

President of the Apex Chamber of Commerce and Industry PD Sharma said the industry in the state was already seeing signs of recession and this was another retrograde step for it.

Seconding his views, co-chairman of the Punjab Committee of PHD Chamber RS Sachdeva said the additional burden would be unbearable for steel as well as textile industry. “Survival of the industry depends on its competitiveness. The additional billing charges will make the steel products more expensive, thus eroding competitiveness of the steel industry of the state,” he added.