Karnataka pharma companies are apprehensive about the growing power crisis in the state as the industry is forced to put up with poor electricity supply. This follows after the minister for energy DK Shivakumar indicating in during the State Assembly sessions on the government’s inability to provide 24/7 power supply owing to daily shortage of 1,000 MW of power.
The state government has now expressed that it would not be able to supply the required power to both the industry and households. This has led the industry to revise its production plans.
The pharma companies are already forced to put up with the hike in power tariff hike of 66 paise as proposed by the Karnataka Electricity Regulatory Commission (KERC). Now the industry is facing the continuous power crisis and the drug manufacturers are forced to re-align their production schedules which are hampering the operational loads, Jatish N Sheth, president, Karnataka Drugs and Pharmaceutical Association told Pharmabiz.
“There are unscheduled power cuts and we now need to invest in alternate power resources like generators which are also expensive to. In fact, the recent hike in diesel prices is another impediment because it drains the capital”, he added.
Karnataka has 236 pharma units and over 90 per cent are under the small and medium category and this also posting a huge challenge to cut down expenses as much of the costs are now directed towards power, said the KDPMA president.
The state has 34 dams and 24 power stations having a total installed capacity 5975.91 MW, according to the Karnataka Power Corporation.
The Karnataka Small Scale Industries Association (KASSIA) has now come down heavily on the Karnataka government efforts to ensure smooth power.
“The persistent power shortfall will impact the survival of the eight lakh micro, small scale and medium enterprises (MSMEs) in the State of which 40 per cent are based in Bengaluru”, said Chidananda M Rajamane, president, KASSIA who added that there will not only be a dip in production but unemployment.
From a national perspective too, India's power sector is heading for a serious crisis as many new plants do not have the fuel to burn, and access to funding is low. But with the Finance Minister’s Union Budget 2014-15 given ample focus to the energy sector including renewable sources of power, a section of pharma hope that the situation would be eased.
“Tax benefits for power generation projects is a welcome move by the government with intent to bridge the demand-supply deficit of electricity”, said Manoj Kumar Upadhyay, chairman & managing director, ACME Group, a leader in energy management advocating use of green technology as energy saving techniques and carbon emission prevention.
According to Kameswara Rao, Leader- Energy, Utilities Mining, PwC India, the proposals for power sector presage a positive direction, to enhance energy security through renewable energy and feeder segregation which will improve availability and quality of power supply.