Auto makers in a power struggle in Maharashtra

Auto makers in a power struggle in Maharashtra
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First Published: Sat, Mar 15 2008. 02 26 AM IST
Updated: Sat, Mar 15 2008. 02 26 AM IST
Pune: The spectre of extended load-shedding in Maharashtra, which faces a 4,500MW shortfall in power supply this summer, has forced large vehicle makers into a desperate search for alternatives. With planned power outages of three-six hours facing the state, Tata Motors Ltd is already taking steps to avert disruptions at its Pune plant, which makes medium and light commercial vehicles and passenger cars.
The country’s largest commercial vehicle maker has started contacting suppliers to gauge the possible effect of the power outages on its suppliers and ensure continuous supplies.
“We want to plan our procurement of components in advance so we can try and reduce the impact on our production,” said a company executive who did not wish to be identified.
With just in time delivery now an established manufacturing practice, companies such as Tata Motors and Bajaj Auto Ltd are vulnerable to disruptions as a large number of small- and medium-sized suppliers in the Pimpri-Chinchwad, Bhosari and Chakan belt will see their production hit by the load-shedding.
Larger suppliers have generator sets that can support their factories, but hundreds of small units would have to cut down production. Large original equipment manufacturers also have the option of slowing production, sourcing from other states or shifting production partially to their other centres.
Industry leaders from Pune are awaiting the decision of the state power regulator, the Maharashtra Electricity Regulatory Commission (Merc), on a new proposal that will try to minimize the effect of load-shedding.
With the demand for power increasing every day, the Confederation of Indian Industry (CII), which pioneered the Pune model of captive power generation almost two years ago, has submitted a plan that could see these companies directly buying millions of units of power a day from outside sources under the partial open access system for Pune city.
An existing regulation requires industries in the state to switch to a five-day production week instead of six days if the power shortfall exceeds 4,500MW.
The original captive power project by Pune’s industry has players including Tata Motors and Thermax Ltd generating power for their own requirement, thus freeing the load on the common grid. The additional power available is then sold to consumers who pay an additional fee.
As a result, Pune did not have any load-shedding last year but with power demand in the city going up by 14%, the captive power generating initiative is no longer adequate.
“There was a shortage of 310 million units of power in Pune, and this year, it is projected to be 350 million units,” said Pradeep Bhargava, vice-chairman of CII’s Maharashtra state council. “The regions around Pune, such as Ahmednagar, are already suffering from power outages even before it is officially in place.”
Car maker General Motors India Ltd has been facing a different struggle with the state’s electricity authorities. The company, which is set to launch a new manufacturing plant at Talegaon, near Pune, currently receives 5MVA of power though it had requisitioned for 10MVA.
However, the Maharashtra State Electricity Transmission Co. Ltd was unable to erect the transmission towers that were to supply power to the car maker’s plant at Talegaon. “The company was originally scheduled to kick off trial production in January but since the 40 towers that were to be put up to bring power to the plant were not put up till then, the plans were postponed till March. Even that is not possible now since there has been very little progress on the matter,” said a government official, who did not want to be identified as he is not authorised to speak on this issue.
However, General Motors India director and vice-president of corporate affairs P. Balendran, who met government executives on Friday to resolve the issue, said the state government has made alternative arrangements and the company is on schedule to start trial production at the plant.
“In fact, we will be starting the trial production some time next week, which is three weeks ahead of schedule,” Balendran said in an emailed response to a question. The trial production was slated for the second week of April.
The scheduled opening of this plant is a critical part of General Motors India’s business plans as it works towards garnering a 10% share of the Indian market by 2010.
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First Published: Sat, Mar 15 2008. 02 26 AM IST
More Topics: Auto Makers | Tata | Bajaj | Power | Load-Shedding |