People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 46

November 18, 2012




Tamilnadu: Wages of Power Privatisation


S P Rajendran


ABOUT a decade ago, the Communist Party of India (Marxist) and the Electricity Employees Federation of India (CITU) had thus told the country: The purpose of the Electricity Bill is to deregulate the Indian power industry and finally handover the system to private operators for making profit. This measure will put the power sector in disarray and result would be power cost will be raised to unaffordable level and power crisis will continue to haunt the country.


After nearly a decade of the implementation of the Electricity Act 2003, major parts of the country are now haunted by prolonged power crises. Many states such as Tamilnadu, Karnataka and Andhra Pradesh are facing prolonged power cuts.


Tamilnadu is a typical example of this crisis. 


Within one month --- from September 27 to October 27, 2012 --- the state witnessed two total hartals in Coimbatore and once in Tirupur, both of which are major industrial hubs. There were also shutdowns in many towns including Madurai, Erode and Karur for a day, protesting the 14 to 16 hours of power cut daily.


Power cuts have hard hit every section of society, including farmers, traders, powerloom operators, shopowners, workers, doctors, housewives, students, and small and big industrialists.  Community water tanks in villages and towns have dried up because there is no power to work the motor pumps. 


Many rural areas are experiencing power cuts ranging from 12 to 16 hours a day, crippling the agricultural operations.  Power cuts are occurring once every half an hour. The supply rarely lost for an hour. Farmers are forced to spend sleepless nights near the pump sets as power supply gets disrupted 10 to 15 times every night. 


Prolonged power cuts have affected every conceivable industrial activity: Powerlooms, textile mills, foundries, welding sheds, electroplating units, factories manufacturing wet grinders, pump sets, mixies , automobile components and aluminium, brass and stainless steel utensils. Cottage, tiny and middle level industries are the worst hit.


Equally hurt are continuous process industries such as yarn mills and textile mills which are forced to use diesel generators because their electricity requirements are high.


Due to this situation, lakhs of workers had lost their jobs and their daily wages.


On the other hand, multinational companies in and around Chennai are getting uninterrupted power supply.


The southern districts of Tamilnadu have suffered massive deindustrialisation over the past five years mainly due to the power crisis that has hit the existing units very hard, forced many to close down and scared away potential investors.


The Tamilnadu Small and Tiny Industries Association (TANSTIA)ís vice president, K R Gnana Sambandan, said in an interview that the deindustrialisation process had occurred despite a slew of government incentives for setting up industries in backward and southern parts of the state, as power is the ultimate determinant. 


Even though the state government established IT parks with much fanfare in Madurai and other southern districts, none has fully taken off as the software majors preferred Chennai, primarily because of power supply.


On the textile front, he said, Madurai, which was home to 40 textile mills 20 years back, had just one major mill left. Further, many polythene extrusion units located in and around Madurai had completely migrated to other cities. It was because of power crisis that Madurai could not benefit from the BHEL unit at Trichy and the ancillary units despite being only a 100 km away. 


Ganana Sambandan further said the few surviving industries in the south, such as sea food processing units in Thondi near Ramanathapuram and Tuticorin and light engineering companies that manufacture electricity transmission materials like poles and transmission lines in Paramakudi, were fast losing their competitiveness because of the power crisis.


T Sitaraman, founder president of Plastic Manufacturers Association (PLASMA) of Madurai, said more than 40 per cent of the chemical and plastic industries in southern districts have closed down over the past three years. Since 2007, he said, there have been no major investments in the sector; the surviving companies too have cancelled expansion plans. While a few new units did come up, many more closed down. 


M R Rajendran, president of the Kappalur Industrial Estate Manufacturers Association in Madurai, which has around 300 small units employing 12000 workers in the estate, said at least ten units in the estate have shut down in the past three months alone, throwing more than 1000 workers to joblessness. 




But the government is not ready to address the crisis and a blame game is on between the chief minister Jayalalithaa and former chief minister Karunanidhi. Each holds the other one responsible for the situation. But the fact is that both these parties, which have alternated in power in the state for years, are to be equally blamed, apart from the current UPA government and the previous BJP led NDA government at the centre.


At the heart of the problem is a 3500 MW shortage. Tamilnaduís demand for electricity is 12000 MW now. But the central government is not ready to help the state governments and the deregulation of the power sector in the line of dangerous Electricity Act 2003 is taking place gradually. Yet the state government too cannot escape its share of blame as it has failed to complete the power generation projects that began a decade ago.


Nine power projects were initiated by successive governments in Tamilnadu from 2001 to 2011, but to date none of them is generating power. These projects are 1500MW Vallur thermal power project near Chennai; 1500MW joint venture in Tuticorin; 500MW additional unit of the North Chennai thermal power station; 500MW Kundah hydel generation project; 660MW thermal power project at Ennore; 600MW new unit at Mettur thermal power station; 1200MW North Chennai thermal power station Stage 2; 1600MW Udangudi thermal power project and 600MW unit at Vallur.


Many cities and towns of Tamilnadu are experiencing powerful spontaneous protests demanding uninterrupted power. Other than the industrial hartal held at Coimbatore and Tirupur, thousands of people in hundreds of rural and towns organised road blockades and gheraos of electricity offices.


Across the state the CPI(M), CITU, DYFI and AIDWA cadres have staged various protest actions in hundreds of centres.


The Students Federation of India organised a novel protest statewide. Thousands of students gathered in front of Tamilnadu Electricity Board (TNEB) offices and paid homage to power transformers. 


The Communist Party of India (Marxist) has demanded that the Electricity Act 2003 must be scrapped. CPI(M) state secretary G Ramakrishnan has demanded that the AIADMK government must act immediately, get more power from the central grid, also complete the pending projects expeditiously and provide subsidy on the diesel being used to operate generators and on solar power equipments.