SMEs Crippled by Power Crisis, Cry for Government Help

Published: 31st October 2014 06:03 AM  |   Last Updated: 31st October 2014 07:28 AM   |  A+A-


An image of workers at a small scale industry. (File)

VISAKHAPATNAM: Small is beautiful. But, nearly three weeks after cyclone Hudhud ravaged the industrial city of Vizag, the small and medium-scale enterprises (SMEs) seem to be anything but beautiful. The situation has turned worse because of short supply of power to many SMEs, which are already in shambles and crying for the government’s help to revive their operations.

Hudhud had caused severe damage to SMEs in the region, particularly Vizag city, with almost every unit suffering damage to rooftops, walls, electric equipment and even machinery. Many of these units depend on public sector industries like Visakhapatnam Steel Plant (VSP) and Visakhapatnam Port Trust (VPT), for work. At a time when the major industries like VSP, Hindustan Shipyard, VPT and HPCL-Visakh Refinery are struggling to fledge their operations full-scale, the plight of nearly 3,000 SMEs in north Coastal Andhra region can be left to anyone’s imagination.

There are about 1,900 SMEs in the district and 30 per cent of them suffered major damages and incurred losses amounting to about `300 crore. A preliminary report on damages incurred by the SMEs has been sent to the government by the industries department and a detailed evaluation of damages is being carried out for necessary action by the government.

“With even the major industries struggling to revive their operations, it has become virtually impossible for the smaller units to survive unless the government comes to their rescue,” said Ramakrishna Narappareddy, founder-president of Autonagar Small Scale Industries Association (ASSIA) in Visakhapatnam. In Autonagar alone, the SMEs make a turnover of `200 crore per year and about 20,000 workers depend on these units for livelihood, directly or indirectly.

A majority of the SME units are located in the industrial areas of Autonagar, Kancharapalem Industrial Estate, Peda Gantyada and Gambhiram. But, many of them are still groping in the darkness as the officials are yet to restore power to about 30 per cent of the industries.

“Though power has been restored to some units, they are not in a position to commence operations due to various reasons including damages to machinery and delay in full-fledged commencement of operations in the PSUs,” the officials of industries department pointed out.

The Autonagar Industrial Estate is in ruins with collapsed rooftops and damaged machinery/equipment. Adding to the woes, about 50 per cent of the units do not have insurance cover. Even for those units having one, it would be difficult to get the full claim amount due to various factors.

“Such devastation was unexpected for many units and it is impossible for us to revive operations unless the government announces assistance or a bailout package,” stated YV Satyanarayana, a manufacturer of bearings.

Against this backdrop, the SMEs are demanding that the state government extend the special package announced under AP Reorganisation Act for new industries in north Coastal Andhra and Rayalaseema districts, to the existing units hit by the cyclone. Apart from the government’s assistance, the units are demanding rescheduling of existing loans in consultation with the Reserve Bank of India and extend fresh financial help to buy new machinery. They are also demanding concessions on payment of power bills and property taxes.


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