Spinning mills fault power utilities on FSA

The Andhra Pradesh Spinning Mills’ Association has urged the State government to direct power utilities to levy fuel surcharge adjustment (FSA) on the industry for variation in fuel cost and not on cross subsidy, capital cost and arrears.

The current FSA, fixed on the basis of capital costs, cross subsidy and arrears is “absolutely unreasonable and unethical” and was against the principle of fair pricing. FSA burden with reduced power availability had totally crippled the textile industry in the State and led to a situation of “gloom”.

The Rs. 1.32 FSA for April – June quarter of the current year had no correlation with either the quantum of power or the variation in fuel cost.

“Many textile companies are on the verge of default on their bank loans,” association honorary chairman P.K. Agarwal said. He lamented that the spinning industry, with a total membership of 150, was on the verge of collapse because of power shortage and “burdensome” FSA.

The power and labour intensive industry could get just about 40 per cent of power due to restrictions and control measures put in place. “Industry has no ways and means to recover higher cost of production on account of FSA from its customers,” he said. Expressing concern that problems of cotton farmers would multiply if the current situation persisted and textile companies would be shut down, he urged the government to ensure adequate power to the industry so that it could work at its full capacity.

‘Spinning industry with a total membership of 150 is on the verge of collapse’

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