Power problems persist in Tamil Nadu
19 April 2012An acute power crisis is threatening to cripple Tamil Nadu's leather exports. Hundreds of companies in Tamil Nadu's leather belt have been hit by power shortages, leading to as much as a 25% increase in production costs.
Enco Shoes is a medium sized leather unit in a state that is India's leader in leather exports. K Najmul Hasan, MD, Enco Shoes, says, ‘There are just about 50-60 more ancillary units that would be able to survive this season even if the power situation doesn't look up. It'll have a big impact on us as an exporting company because these companies support us.’
M Rafeeque Ahmed, Chairman, Council for Leather Exports says, ‘Here the power crisis is so high that it's affecting our costs and then our delivery schedules very badly and we’re very worried about how we'll meet our international commitments. The leather industry in Tamil Nadu is a major export industry. 90% of it goes for export.’
Tamil Nadu is on the verge of losing its edge as India's leader in leather exports, thanks to this acute power shortage and it’s no better across the state. Tamil Nadu now suffers a deficit of 3000-4000 mega watts and a debt ridden Tamil Nadu Electricity Board (TNEB) is unable to manage the situation.
Tamil Nadu was a power surplus state till as recently as 2006.
But constant policy changes ensured there were no new projects commissioned nor any tariff revisions for 11 years.
TNEB started purchasing power in 2008, and since then its losses started piling up and stands accumulated.
Rajeev Ranjan, Chairman, TNEB says, ‘We are looking at 4500 mw of new capacity addition with this year and some of them are in very advance stages.’
Source: IBN
