Recently, SAIL had floated a tender for 80,000 tonnes of silico manganese and it has gone to mostly West Bengal units at around Rs 20,000 per tonne with MEL being not in the picture. This price for future supply, is even lower than the current price of supplies to SAIL.

As per the present purchase policy dictated by the management consultants, SAIL has to buy from the lowest cost supplier, which will help save hundreds of crores. MEL being a subsidiary of SAIL and its main supplier of manganese alloys, was to be assisted and SAIL had set up a task force to revive MEL and Alloy Steel Plant at Durgapur.

The task force wants MEL to set up a 40 MW coal basedpower plant. Since neither SAIL nor MEL have enough resources for this venture which will cost Rs 160 crore a joint venture was suggested and three parties had responded.But now the Maharashtra government does not want any more captive power plants as it will hurt MSEB and drive away its milch cow, the high tension consumers like fero alloys and steel producers.

On the other hand, West Bengal chief minister Jyoti Basu has declared that his government will encourage all big users to set up captive power plants, even if it means lesser revenue for the state electricity boards.

West Bengal currently encourages high tension consumers by offering the lowest possible power rates and wants to consolidate the future by encouraging captive power plants.

Maharashtra government currently charges very high rate for power - around Rs 3.80 per kwh and in metropolitan areas over Rs 4 per kwh. This has driven to closure the biggest manganese ferro alloys industry in India and may see its demise.

High power cost hasalso put to losses such profitable alloy steel producer like Mahindra Ugine and drive Mukand and Kalyani out of Maharashtra to Karnataka to produce their basic raw material steel.

Most of the other arc furnace steel units in the state are incurring losses or are already closed.

Not only Maharashtra government charges high power rates it also does not allow most of its HT users to procure NTPC power which is much cheaper for export production. This NTPC power usage is encouraged by Andhra government which has built up a large export- oriented ferro alloys industry.

So, the Maharashtra government is adopting a dog in the manger policy for its HT users. It has recently set up a Maharashtra Electricity Regulatory Commission to hear the problems of the users and suggest tariff rates which could make viable the HT users.

Meanwhile, HT users in the state are banding together. MEL, Khandelval Ferro Alloys Ispat Industries are demanding that NTPC power for export production be permitted.Their pleas are beingconsidered. Currently, the steel industry is shifting to arc furnace units the world over and the old blast furnace coke oven plants are giving way to these new technologies.