About 85 per cent of the mini steel plants in Chhattisgarh have permanently shut down owning to higher power tariff and the rest had been somehow managing to run their units while incurring huge losses, President of Chhattisgarh Steel Chamber Ramesh Kumar Agrawal informed in a statement issued here on Tuesday.
Agrawal said that even if all the mini steel plants shut shop in Chhattisgarh, their owners would end up paying Rs 13 lakh to Rs 15 lakh as arrears for power supply per month to the Chhattisgarh Electricity Board. He said that the global recession in the iron and steel industry continues to have an adverse impact on the mini steel units which employs workers numbering in lakhs.
If the State Government fails to come out with a package for the mini steel units, a large number of workers would automatically lose their jobs with the mini steel plants, Agrawal said. The mini steel plants act as a link between the sponge iron units and rolling mills.These mini steel plants manufacture ingots and billets out of the sponge iron supplied to them and later make it available to the rolling mills for making finished products, he said.
Agrawal said that all the units in the iron and steel sector are part of a single chain and if one section of the industry is affected, it would disturb the working of the entire sector. There are three types of power tariff prevalent for the furnace industry in Chhattisgarh—The mini steel plants in Raigarh pay power tariff at the rate of Rs 3.18 per unit while the captive power plants located in Urla, Siltara and Borai regions pay Rs 3 per unit. Whreas the mini steel plants dependent on power supply from Chhattisgarh Electricity Board end up paying Rs 4.97 per unit, he said.
A recent Central Government notification has ended the mandatory requirement of having quality control measures taken on finished products while other states still have mandatory requirement on quality of finished products, Agrawal said. The mandatory requirement of having quality control on finished products would encourage import of cheap iron while causing a big drain on foreign exchange reserves, he stated.