Frequent power blackouts are taking a toll on the confidence of India?s Silicon Valley. Bangalore, which fetched Rs 68,500-crore foreign exchange for the country last year, is reeling under frequent unscheduled power cuts?sometimes lasting 3-4 hours. This has not only infuriated small-scale enterprises but also the 1,800-company strong IT/ITes sector in the IT city. According to estimates by the Federation of Karnataka Chambers of Commerce and Industry (FKCCI), the power cuts are resulting the IT hub?s industrial belt losing around Rs 400 crore a day.
Bangalore requires 33 million units (mu) per day but it is currently receiving only around 30 mu. The demand may increase by another 2 mu per day during the summer months. So the worst is probably yet to come.
Talking to FE, Infosys HR head and board member TV Mohandas Pai said, ?Karnataka?s power policy is a sad story and a complete failure. The power sector managed by public enterprises is not effective. The state?s power situation has only worsened in the past 30 years.?
He said the frequent power cuts ahead of the Global Investors Meet (GIM), scheduled for June in the city, would affect Brand Bangalore, which put India on the global economic map. ?We need to have a radical shift in the model and the government should ensure uninterrupted power supply,? he added. Instead of planning for temporary solutions to overcome power shortages, he said the state government should plan to produce surplus power.
The IT city houses 7-lakh people working in the technology sector and there are more than 70,000 small industrial units engaging over 4-lakh workers rolling out 3,000 products. The city is also home for close to 60% of 782 large and medium manufacturing facilities in the state.
Such an industrial-friendly state deserves better power infrastructure. Low-cost airline pioneer Captain GR Gopinath, who is now chairman and managing director of Deccan Express Logistics, says the government should allow the private sector to produce and distribute power. ?Let the consumer decide on where to purchase the power either from the public enterprises or from the private producer,? he said. Allowing the private players in production and distribution of power directly to consumers will improve the power supply, he said.
J Chrasta, president of Federation of Karnataka Chambers of Commerce and Industry (FKCCI), says the unscheduled power cuts are causing around Rs 400 crore loss per day to the Bangalore industrial sector. The larger industrial set ups own captive power generation units but their cost of production would increase as we move into peak summer and eat into margins, he adds. The total turnover of Karnataka industrial sector stood at Rs 3.65 lakh crore per annum, of which 60% comes from the industrial units in Bangalore with a larger chunk from the IT segment. Uma Reddy, president of Consortium of Electronic Industries of Karnataka, an umbrella association for around 700 electronic & allied component producers told FE, ?Most of the small and medium enterprises would be forced to shut their operations if the unscheduled power cuts continue for another one or two weeks.?
The power requirement in the Bangalore circle is growing at a rapid pace. The state-owned power distributing body, Bangalore Electricity Supply Company (BESCOM), is adding 2-lakh consumers ever year, said H Nagesh, technical director of BESCOM, which currently has around 30.61 lakh consumers including 682 high tension and 7,100 low tension industrial power consumers.
The inadequate water levels in hydel power generating stations across Karnataka is hurting Bangalore. During normal days, the power demand of the state stood at130-135 million units (mu) per day when the supply is in the range of only 120 mu per day, of which around 30% consumed in the Bangalore circle. Of the total available 120 mu of power, 40 mu comes from hydel stations while another 40 mu generated through thermal stations followed by 7-8 mu from non conventional energy plants said Karnataka chief secretary SV Ranganath. The centre and private players supply around 30 mu. The state government is implementing a few thermal power projects, but it would take another 3-4 years to generate power.
Prior to the summer days, the power demand of the state stood at 130-135 million units (mu) per day when the supply is in the range of only 120 mu per day, of which around 30% consumed in Bangalore circle. Soaring temperatures onset of summer has pushed up the state?s power demand further to 145 mu per day, resulting in 20-25 mu shortage per day. Of the total available 120 mu power, 40 mu comes from hydel stations, while another 40 mu is generated through thermal stations followed by 7-8 mu from non-conventional energy plants, said Karnataka chief secretary SV Ranganath. The Centre and private players supply around 30 mu. The state government is implementing a few thermal power projects, but it would take another 3-4 years to generate power.
T Parbrahman, chairman of CII-Karnataka and managing director of Toyoda Textile Machinery Pvt Ltd, a joint venture company of Toyota Group and Kirloskar, said a majority of industrial units have started running on their own captive power plants due to frequent power cuts. In this case, he said the government should offer tax rebate on fuel (diesel) to run the captive power units at reasonable cost. Further, the government should also assist the local industrial bodies to produce and distribute power to their members at subsidised cost until the state increases its power generating capacity.
With the demand-supply gap increasing on the back of summer, the state plans to buy around 850-mw additional power from outside for two months starting from March, according to Karnataka chief minister BS Yeddyurappa. The additional purchase of power will cost the exchequer Rs 800 crore.