New Delhi: 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 per cent 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. Leather industry in Tamil Nadu is a major export industry. 90 per cent 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. From a 2000 mw crunch a year ago, 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 and vote bank politics 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 at 50,0000 crores today.
Rajeev Ranjan, Chairman, TNEB, "We are looking at 4500 mw of new capacity addition with this year and some of them are in very advance stages."
And with the controversial Koodankulam Nuclear power plant also set to be commissioned soon, Tamil Nadu will hopefully see brighter days in the near future.
Tamil Nadu over the years has emerged as a manufacturing hub, but its industrial image has taken a beating thanks to the massive power crisis. And even though the government is confident of easing the situation by fast tracking the power projects, the state will have to brace itself for a powerless blazing hot summer.