Few takers for energy efficiency project
Despite a dearth of power in the north, small and medium entrepreneurs are not keen to profit from the energy efficiency project introduced by the State Bank of India (SBI). The energy efficiency project for energy-intensive SMEs was rolled out by SBI in the second half of 2005 in the Chandigarh circle (Punjab, Haryana, Himachal Pradesh, Jammu and Kashmir and Union Territory of Chandigarh). So far, the preliminary/walk-through energy audit of 83 units has been conducted and the detailed energy audit of 10 units has been done in the past two years. It is surprising that while Punjab alone has more than 200,000 small and medium industries and has clusters of iron foundries and forging units (which make intensive use of energy), only 83 units came forward and only10 out of those implemented energy conservation measures. According to sources in SBI, 50 per cent of the cost of energy audit or Rs 50,000 per unit,whichever is less, is to be borne by the bank and remaining by the unit. There is a funding incentive also where fresh term loan up to 90 per cent of the cost of equipment (Rs 2 lakh to Rs 1 crore) for the energy conservation can be obtained at a concessional rate. The study of the SME sector in the north reveals that most of the entrepreneurs are averse to growing bigger as it would invite tax implications. For instance, if the turnover grows beyond Rs 1.5 crore, they come under the ambit of excise. "It is not the fair charges but the hidden costs, the rampant corruption in Punjab, that undermines the spirits of entrepreneurs to increase the value and volume of business', said one of the small entrepreneur. But those who undertook this project were able to cut the cost of energy consumption by 10 per cent to 20 per cent. An official of Venus Cotsyn India Limited told that they implemented all the suggestion offered by the consultants for the efficiency of steam supply, air supply and electric power and the results were fruitful. Similarly, Ludhiana-based Eastman Forging and Casting was also able to save substantially on account of energy efficiency project. A senior official at the Local Head Office of SBI Chandigarh said that despite the minimum saving of energy consumption cost of 10 per cent to 15 per cent that can go up to 25 per cent 30 per cent in specific cases, the response of industry has been lukewarm.