Ferrochrome producer, Balasore Alloys Ltd (BAL), a Ispat group company, has decided to approach Grievance Redressal Forum (GRF) of North Eastern Electricity Supply Company (Nesco) on the payment of Rs 167 crore dues after the Odisha High Court held the disconnection notice sent by the power distribution firm as valid.
BAL asserted that Nesco cannot disconnect power supply to its plant as the matter has not been fully settled yet.
“We are soon going to approach the Grievance Redressal Forum (GRF) to resolve the matter. Even though Nesco has sent us the notice, it cannot disconnect the service until the matter is fully settled,” said B L Panda, director, operation of BAL.
On August 24, the Odisha High Court had dismissed a writ petition of BAL urging it to quash a disconnection notice sent by Nesco. After the HC decision, the power distributing company (discom) had slapped a fresh disconnection notice on August 31 and asked the ferrochrome company to pay up the dues.
This is the third disconnection notice sent by the discom in last eight months to the company.
On December 16 last year, Nesco had first issued a notice asking the company to pay its outstanding bills within 15 days, against which the company had moved the HC.
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The recent notice sent by Nesco has also given a 15-day deadline. However, BAL need not have to pay the bills if it approaches the GRF before the end of deadline, the court order said.
The dispute related to payments came up in 2005, when the company could not pay its discounted electricity bill of Rs 43 crore within stipulated time. Nesco argues that since BAL paid the dues much later than the deadline, it is not eligible for any concession and has to pay the full bill amount. The full bill amount along with penal interest, surcharge and a demand to submit security deposits now totals to a whopping Rs 167 crore.
Electricity plays a major role in chrome ore smelting and comprises more than 35 per cent of the cost of production of ferrochrome, used in making stainless steel. Many producers therefore prefer to establish captive power plant to minimise their dependance upon state-supplied electricity, which is costlier.
To meet this key requirement, BAL also has plans to own up a power plant, but it has not come out with a proper proposal yet.
“We need to get 135 MW power supply for our smelting plant. We might either go for a captive power plant or invest in an existing power plant to meet our need. Our board will decide about it next week,” said Panda.
Apart from power supply sources, the company is currently focusing on its Rs 800 crore expansion plan that include ramping up chrome ore production from its captive mine and enhancing smelting capacity, after delaying it for more than two years.
“All the preparatory woks for Rs 600 crore mines project and Rs 200 crore smelting capacity enhancement project has been completed. We will start the work by January,” the company official said.