KSEB Throws Spanner In The Works Of Kinfra Rubber Park Venture

Thiruvananthapuram, June 27: | Updated: Jun 28 2003, 05:30am hrs
Industry stampeding for subsidies has always brought out sparks from power ministry mandarins everywhere. But in Kerala, the new flashpoint is Kerala State Electricity Board (KSEB) deciding to play spoilsport, exactly when state industry ministry is showcasing its lowest power tariff advantage to countrywide investors. The latest to emerge battle-scarred in the KSEB-industry ministry rub is the Rs 36-crore Kinfra-Rubber Board joint venture in Airapuram, near Kochi. The Rubber Park is slated to be unveiled next week, stripped of the tariff promise it made to prospective entrepreneurs.

After one whole year of tug of war over getting a 110 KV line and power distribution licence, KSEB has obliged, not with grace. The grid tariff incentive to the park has been cut to half, bringing the power tariff in the park, at Rs 3.50 per unit, on par with the tariff in neighbouring Tamil Nadu. This is while the Kerala government, at its Global Investor Meet (GIM), was claiming to be running the lowest band of power tariff in the country.

The earlier understanding with KSEB was that every occupant could get power from the Rubber Park grid at Rs 1 per unit below the market price. Grid price to Kinfra Rubber Park is also KSEB's last chance to play spoilsport to industry. The Tariff Regulatory Commission has already taken reins of the power pricing in Kerala. "Industry ministry will appeal to the Commission on the tariff letdown," Kinfra sources told FE.

This is also not the first time that KSEB has embarassed Kinfra parks. Last year, another Kinfra park in Kochi had lost its coveted UNIDO assistance because the KSEB had backed out of its power supply commitment.

Casualties have already come in to the Rubber Park, in the form of its biggest potential investor - Rubber Marketing Federation - shying away from leasing land for its Rs 9-crore unit. Solvents and adhesive project by L&P Rubber Products is also yet to firm up. "About Rs 20-crore worth investment is in the pipeline," a senior Kinfra official has claimed.

On the other hand, the cash-strapped KSEB is not in a position to afford the subsidy largesse that the state has been hawking in its industry-hunting season. KSEB's yearly revenues touch only Rs 2,600 crore, where at least Rs 3,500 crore is needed.

"What is the justice in making the Board pay for winning more industries It is a vicious circle," state power minister Kadavoor Sivadasan retorts. The chip in the power ministry's shoulder against industry is not without cause. But for Rs 600-crore unpaid arrears by sick units- public enterprises and otherwise, KSEB would not have been in its present crisis.