NEW DELHI: The logjam over the mega 2000-MW Subansiri Lower Hydro-electric Power Project inched towards resolution, with all the parties to the dispute agreeing to set up an eight-member expert committee.
The consultation meeting convened by the Union Ministry of Power to break the stalemate over the Subansiri Project that has been stalled for the last three years, was chaired by Union Power Minister Piyush Goyal and co-chaired by Union Minister of Youth Affairs and Sports Sarbananda Sonowal.
The meeting was attended by representatives of 29 organisations including All Assam Students’ Union (AASU), Asom Jatiyatabadi Yuva Chatra Parishad (AJYCP), Krishak Mukti Sangram Samiti (KMSS), besides 23 ethnic groups. The meeting was also joined by 10 MPs representing all the political parties.
The meeting was also attended by top officials of the Power Ministry, Additional Chief Secretary (Power) VB Pyrelal, senior officials of the Central Water Commission (CWC), NHPC, besides the Ministry of Environment and Forest among others. Technical experts drawn from NHPC and CWC also made presentations at the meeting.
The meeting that lasted for over five hours, was described as positive and held in a cordial atmosphere and barring Akhil Gogoi-led KMSS, which expressed serious reservations over the agreement, the other organisations were more or less satisfied with the outcome of the meeting.
In sharp contrast to yesterday’s stormy meeting with the technical experts, there was no rancour today, with the Power Minister today adopting a conciliatory tone. In his opening remarks, Goyal explained the need to set up the project, which would be beneficial to all.
He argued that the project would generate income for the people, provide employment to local people and change the economy of the area, while the State would get electricity. But he added in the same breath that he would not go against the interest of Assam and would abide by the decision taken at the meeting.
Goyal, who left the meeting mid-way and again re-joined it in the afternoon, further said that he wanted a permanent solution and positive outcome. He said the representatives should decide what to do with the project and whatever decision they take would be respected by him.
But he made it clear that the Government of India cannot change its policy for one single project. This was in reference to the demand by the organisations for supply of 12 per cent free power from the project. The demand was rejected by the Minister.
Later briefing newsmen, Sonowal announced that an expert committee comprising eight members, four each representing the State and Centre, would be constituted to study the project. The suggestions made by the various organisations would be the terms of reference of the Committee, which would submit its report within three months.
Later, AASU advisor Samujjal Bhattacharya told newsmen that the deliberation was positive and they hoped that the outcome would be fruitful. This is the first discussion at the Central level and opinion of the technical experts of the State should be respected.
He said an eight-member expert panel would study the report of the Assam’s technical experts, study the Thatte and Reddy Committee’s report and study the cumulative downstream impact. The technical team would also consult experts from within and outside the country before submitting its reports.
The AASU advisor further said that they want a study of the cumulative downstream impact of all proposed dam projects in Arunachal Pradesh.
Akhil Gogoi said that though the eight-member expert committee was acceptable to them, the time limit should have been at least six months. Further he said that they wanted a cumulative downstream impact study, but the Centre did not show much interest.
Gogoi said he was also upset with the rejection of the demand for 12 per cent free power and the need to declare Assam as a downstream area for which the Centre said there was no provision.
President of AJYCP, Manoj Baruah said that the deadlock has been broken though some of the issues they have been raising have not been resolved. “We will wait for the verdict of the expert committee,” he said.
Chief Executive of Mising Autonomous Council (MAC) Dr Ranoj Pegu said that he was happy with the outcome of the meeting as all aspects were discussed.
(Source; The Assam Tribune, December 12, 2014)
NTPC HAS TO MAKE MORE PROGRESS ON CAPACITY UTILIZATION
If plant load factors don’t improve, there is a chance that NTPC’s return on equity in the coming years will likely decline. That is an overhang on the stock.
Thermal plant load factors (PLFs), or capacity utilization, are improving at NTPC Ltd. PLFs rose from less than 70% in August to 74% in September and further to 81.6% in November, Central Electricity Authority data shows. Clearly, the coal supply situation seems to have improved, while demand for power has increased across the country. If the current trend continues, the company can look forward to a better second half of this fiscal year.
Why is that optimism not reflected in the share price movement? Since 1 September, when PLFs began to improve, the stock has fallen 3.5%. The S&P BSE 500 index in the same period gained 5%. The underperformance points to the progress NTPC still has to make.
Only five coal-fired power plants clocked a PLF of more than 85%. With the current regulations awarding incentives for running plants above 85% PLF, the company stands to gain only if it pushes PLFs beyond 85%. To be sure, some gains can already be seen. According to Nomura Research, electricity generation in excess of 85% PLF stood at 518 million units for NTPC in November, more than double the volume it registered in October. But it is a fraction of the 20.2 billion units of power the company produced that month.
There seems to be some scepticism among investors whether PLFs will increase beyond 85%. For that to happen, production at NTPC’s major power plants has to rise, which is contingent on factors like demand and fuel availability. While the former has shown signs of improving—up 8.7% so far this fiscal year compared with 1.7% in the previous one—there are still uncertainties whether the recent improvement in coal supply is sustainable.
What also bites is the firm’s track record in coal mine development. If the Pakri-Barwadih captive coalfield in Jharkhand had been commissioned on time, NTPC would had the capability to scale up the generation and PLF. Its delay has raised doubts in the minds of investors.
“Even if NTPC is allocated sufficient mines to improve its PAF (plant availability factor), we do not see its PLF improving, as the company would have to actually mine the coal, which appears uncertain, given NTPC’s experience at the Pakri-Barwadih mine,” Ambit Capital Pvt. Ltd said in a note.
If PLFs don’t improve, then there is a chance that NTPC’s return on equity in the coming years will likely decline. That is an overhang on the stock.
(Source: Mint, December 12, 2014)
APDCL TO BUY 188 MW POWER FROM BHUTAN
GUWAHATI: The Assam Power Distribution Company Ltd (APDCL) has been able to make an arrangement to procure 188 MW of hydel power from the Nikachhu Hydro Power Project of the Thangsibji Hydro Energy Ltd of Bhutan. To carry the power, the APDCL has signed an MoU with the Power Trading Company of India Ltd (PTCIL).
According to an APDCL press release, it was successful in the bidding for purchase of 188 MW of power from the Nikachhu Hydro Power Project. The APDCL then entered into an agreement with the PTCIL for procurement of power for 25 years from July, 2019. The agreement was signed by MK Adhikary, General Manager (Commercial) and Harish Saran, Executive Director (Marketing) on behalf of APDCL and PTCIL respectively. KV Eapen, Chairman APDCL and Deepak Amitabh, CMD PTCIL, were also present on the occasion.
The press release said considering the long-term perspective of uninterrupted, reliable vis-à-vis cheaper power supply to cater to the rapidly growing demand in the State, the APDCL had participated in the Tariff-Based Competitive bidding on May 26, 2014 on the Request for Proposal issued by the Thangsibji Hydro Energy Limited for sale of power from Nikachhu.
(Source: Assam Tribune, December 12, 2014)
TATA POWER TIES UP WITH RUSSIAN FUND
MUMBAI: Tata Power has signed a memorandum of understanding with Russian Direct Investment Fund (RDIF) to explore investment opportunities in the energy sector.
RDIF was established in June 2011 to make equity investments, primarily in Russia, jointly with international financial and strategic investors.
Based in Moscow, RDIF’s management company is a 100 per cent subsidiary of Vnesheconombank.
The agreement was inked during the state visit of Russian President Vladimir Putin on Thursday.
RDIF and IDFC have also inked a MoU to promote joint investments and each party will provide up to $500 million for the projects.
RDIF and Tata Power will cooperate in identifying and targeting investment opportunities in the energy sector across Russia.
Commenting on the MoU, Kirill Dmitriev, CEO of RDIF, said: “RDIF has identified the energy sector as one of its key priorities for increasing Russia’s economic efficiency and sustainability.
“Our collaboration with Tata Power will not only introduce a new, established player into the Russian market, but will also provide opportunities to leverage Tata Power’s high-class expertise in renewable energy production and implementation of large-scale international projects.”
Anil Sardana, CEO & MD, Tata Power, said: “Tata Power looks forward to working with them to identify opportunities across the energy chain, thereby strengthening India’s relations with Russia.
“The signing of this MoU is a significant milestone for Tata Power and we endeavour to be a significant player in the international energy market.”
(Source: Business Line, December 12, 2014)
JSPL COMMISSIONS BILLET PLANT AT ANGUL
BHUBANESWAR: Jindal Steel and Power Ltd (JSPL) has commissioned its billet caster plant at its 2.5 million tonne per annum (MTPA) integrated steel making complex at Angul, in addition to its existing steel plate unit.
“This would enhance our regional product portfolio since we will now be able to produce long products in addition to the flat products already being produced in the Angul plant,” said Ravi Uppal, managing director and group chief executive of JSPL in a statement.
Billets are produced from molten iron metal and can be further processed into long products, which are primarily used in construction sector. The recently commissioned unit has a maximum capacity of 2.3 MTPA and has a casting speed of 3.6 meter per minute, the fastest in the world.
As part of the 6 MTPA integrated steel project in Angul, first phase of 2.5 MTPA has already been completed. JSPL has, so far, set up the world’s first coal gasification plant to produce sponge iron using indigenous high ash coal . The Angul plant also has the biggest electric arc furnace and the widest plate mill in India. The plate producing unit caters to steel demand in automobile sector.
(Source: Business Standard, December 12, 2014)
RUSSIA TO BUILD TWELVE NUKE REACTORS IN INDIA
NEW DELHI: In a boost to their “special strategic partnership”, Russia will build at least 12 nuclear reactors besides manufacturing advanced dual-used helicopters as the two countries signed 20 agreements in oil, gas, defence, investment and other key sectors today.
Prime Minister Narendra Modi and Russian President Vladimir Putin, in their annual summit, also vowed to take the close ties to a “new level” as both sides outlined a new vision and expand manifold cooperation oil, gas, electric power production and nuclear energy.
In the area of information, the Press Trust of India(PTI) and the Russian news agency Tass signed an agreement envisaging cooperation in exchange of news.
Calling Russia a “pillar of strength” for India, Modi, in a joint media interaction with Putin, said the strategic partner will remain New Delhi’s “most important defence partner” though options have increased.
“President Putin and I discussed a broad range of new defence projects. We also discussed how to align our defence relations to India’s own priorities, including Make in India.
“I am pleased that Russia has offered to fully manufacture in India one of its most advanced helicopters. It includes the possibility of exports from India. It can be used for both military and civilian use. We will follow up on this quickly,” Modi said after around three-and-half-hour long meeting with Putin that comprised restricted as well as delegation level talks.
Referring to cooperation in the nuclear sector, Modi said both sides have charted out an ambitious vision for nuclear energy of at least 10 more reactors and noted that they will have the highest standards of safety in the world. “It will also include manufacture of equipment and components in India. This also supports our Make in India policy,” he said. “Both sides will strive to complete the construction and commissioning of not less than 12 units in the next two decades, in accordance with the Agreement of 2008,” as per vision document finalised by the two countries for nuclear cooperation. The Nuclear Power Corporation of India Limited and Russia’s ATOMSTROYEXPORT (ASE) also signed an agreement for setting up of unit 3 and 4 of Kudankulam Nuclear Power Plant. The 20 agreements signed between the nations provided for cooperation in a spectrum of areas including nuclear energy, oil and gas, health, investment, mining, media and wind power.
(Source: The Statesman, December 12, 2014)
INDIA, RUSSIA SIGN 2 PACTS FOR KUDANKULAM PROJECT
NEW DELHI: India and Russia on Thursday signed two agreements which will set the groundwork for starting units 3 and 4 of the Kudankulam Nuclear Power Project.
At the summit meeting between Prime Minister Narendra Modi and Russian President Vladimir Putin, a supplement to the General Framework Agreement for units 3 and 4 was signed which will operationalise the GFA and Technical Commercial Offer signed in April. Besides, a contract for the implementation of units 3 and 4 of the plant with ATOMSTROYEXPORT supplying some major equipment was also signed.
In addition, NMDC entered into a MoU with ACRON for acquiring stakes by a consortium of Indian companies in a $2-billion project of the Russian fertiliser company.
Setting the bilateral trade turnover in goods and services at $30 billion by 2025, the two countries also signed a number of other agreements including Essar Group’s MoU with VTB for finance arrangement of $1 billion to Essar.
The deal is intended to finance the continued consolidation of certain assets in Essar Group’s investment portfolio and strengthening its capital structure. This financing follows the successful $1.2-billion transaction arranged earlier by VTB Capital, which acted as Financial Adviser and Financier for the company in taking its key assets private. These were listed on the London Stock Exchange, the company said in a statement.
The two countries entered into an agreement for enhancement of cooperation in oil and gas in 2015-16 which includes joint exploration and production of hydrocarbons, long-term LNG supplies and joint study of a hydrocarbon pipeline systems connecting Russia with India.
An agreement for training of Indian Armed Forces personnel in the military establishments of the Defence Ministry of the Russian Federation was also initialled.
A strategic vision for strengthening cooperation on uses of atomic energy between the two countries which envisages a roadmap of bilateral cooperation in the civil nuclear energy sector for the next two decades was also signed.
As part of strategic this vision, the two nations recognised that the agenda for bilateral cooperation in the nuclear power sector is globally one of the largest between any two countries.
A statement says that the two countries look forward to the construction of additional Russian-designed nuclear power units in India, cooperation in research and development of innovative nuclear power plants and localisation of manufacturing of equipment and fuel assemblies in India.
The two countries will also explore opportunities for sourcing materials, equipment and services from Indian industry for the construction of Russian-designed nuclear power plants in third countries.
(Source: Business Line, December 12, 2014)
CENTRE TO GIVE PSUs Rs. 1,000 CRORE FOR GRID-CONNECTED SOLAR PROJECTS
NEW DELHI: Giving a fillip to the country’s renewable energy programme, the Cabinet Committee on Economic Affairs gave its nod to key proposals for the solar power sector on Wednesday.
The proposals include providing support of Rs. 1,000 crore to central public sector units to set up over 1,000 MW grid-connected solar photovoltaic power projects, setting up of 25 solar parks each with a capacity of 500 MW requiring financial support from Centre of Rs. 4,050 crore and setting up of over 300 MW of solar power projects by Defence establishments.
The 1,000 MW to be set up by PSUs will be under various Central/State schemes in three years from 2015-16 to 2017-18, with a condition that all cells and modules used in the plants will be made in India.
Similarly, the proposal for setting up of solar projects by defence establishment under Ministry of Defence and the Para Military Force under the Ministry of Home Affairs was also approved.
Under the scheme, over 300 MW of grid connected and off-grid solar PV projects will come up from 2014 to 2019.
Photovoltaic cells and modules used in plant should be made in India and an amount of Rs. 750 crore will be given by Ministry of New and Renewable Energy from the National Clean Energy Fund.
The Cabinet also approved setting up 25 solar parks and Ultra Mega Solar Power Projects to accommodate over 20,000 MW of solar power from 2014-15 to 2018-19.
The scheme will seek active support of State governments who will have to nominate their nodal agency.
The agency may be sanctioned a grant of up to Rs. 25 Lakh for preparing a Detailed Project Report (DPR) of the Solar Park, conducting surveys. However, the DPR must be prepared in 60 days.
The Centre’s implementing agency will be the Solar Energy Corporation of India.
(Source: Business Line, December 12, 2014)
COAL BILL MIGHT FACE OPPOSITION ROADBLOCK
NEW DELHI: Although the government might be confident about passage of the insurance amendment Bill, the Coal Mines (Special Provisions) Bill, 2014, could face rough weather. The Coal Mines Bill, which replaces an ordinance, is being debated in the Lok Sabha.
While the Left parties and Trinamool Congress have been opposing the Bill, there are rumblings within the Congress against it, which is being perceived as “not transparent”. Several sections within the party are mainly apprehensive of what the Left has termed “de-nationalisation” of coal mines.
This would mean that on the basis of its majority, the government could get the Bill cleared through the Lok Sabha but in the Rajya Sabha with its number deficit, the Bill cannot pass muster in its present form.
The Left and Trinamool Congress had opposed the Bill even at the introduction stage in the Lok Sabha on Wednesday. The Congress is keeping its cards close to its chest. The Congress in the Rajya Sabha has already set up a committee of selected MPs to examine the Bill in detail to identify problematic areas, on the basis of which the party will formulate its stand.
Congress’ Rajya Sabha MPs admitted the party was uncomfortable with the Bill enabling commercialisation of coal mining. “There are lots of issues. The Bill is not transparent. It is a blatant attempt to denationalise coal mining,” said a senior strategist.
Also, the methods and mechanisms it proposes to introduce, such as the bidding process, are not as transparent as it is being claimed, added the Congressman. The party is convinced of the need for reforms in the sector but it feels the Bill is a cover for pushing forward the agenda of the government, which is to bring in private companies.
A leader noted it was possible that while the Bill in its present form gets through the Lok Sabha, amendments could be introduced in the Upper House if the government wants the Bill passed. It can then be sent back to the Lok Sabha again for ratification, as it was done in the case of the Lok Pal Bill.
The government doesn’t have enough numbers in the Rajya Sabha. The opposition has 120 MPs. If the government fails to agree to make changes, the Bill could get stuck or even get defeated in the Upper House.
If the Modi government is keen to get its reforms agenda going without any roadblocks, it will have to play ball with the Congress and address its concerns. Unlike the insurance Bill which was the Congress’ “own baby”, the coal Bill is not and the party has no compulsion to see it cleared. The government, however, has a commitment to the Supreme Court, which has given it time till March 31 to bring in reforms in the sector.
(Source: Business Standard, December 12, 2014)
LET EVERYONE OWN A PIECE OF COAL
The government braces itself for yet another significant task of allotment of coal blocks, this time via an open competitive e-auction process. This is the time to flag some next mile issues that, with a little foresight and planning, could make the process not merely transparent and fair but also more in tune with accepted maxims of economic common sense.
We seek to analyse instruments that could make the result of allocation more broad based, more participatory, and more efficient. Coal is a natural resource and a national resource. It is created by nature. So, who should own it? Who should stand to benefit from its commercial exploitation?
It would be retrograde to suggest a retreat to the government-ownership paradigm that existed after the Coal Nationalisation Act of 1973, which produced sub-optimal results. The Coal Mines Special Provisions Ordinance promulgated recently is a welcome step to move away from the past legislative framework. The monolith Coal India Limited (CIL) and its subsidiaries are still struggling to supply coal users and the extant power coal supply crisis is essentially a hapless aftermath.
Coal imports have surged to 168.4 million tonne (mt) in the last fiscal and are choking seaports; The Railways is having a tough time supplying rakes to logistic providers for inland imported coal supply. China imports 290mt coal and thanks to the domestic coal extraction impasse, we will surpass Chinaanytime soon. Of course, this is no achievement, given that India has the fourth largest coal reserves in the world.
As each of the 204 coal blocks in the country go under the hammer, a handful of companies will come to hold possession of these coal blocks. Thus ownership in the natural resource would remain restricted to a few private players, bringing in concomitant issues of monopolies.
Even while the ownership of coal block rests with a few big companies, what about the retail investors? They have investable resources and if anything, recent trends in India Market (stocks, savings in banks, post offices and now Kisan Vikas Patras) clearly show people want to invest in instruments that give good returns.
The idea of equity suggests that when ownership of a natural resource is being changed from government to private firms, every investor must get an opportunity to own it. Several mechanisms could bring about an element of shareholder democracy in the much constrained world of natural resource management.
In an IPO, 35 per cent of the issued capital has to be offered to retail investors. A similar model can work for coal auctions as well — a portion of the block can be reserved for retail investors. If the block is valued at Rs. 1,000 crore, 10 per cent of it can go to retail investors. The block could be owned by a special purpose vehicle and it would mandatorily float scrip equivalent of Rs. 100 crore in net asset value, which would be available for the retail investor and this scrip would be tradable.
This would result in an arrangement where the promoter will still take major commercial decisions on the utilisation of the coal blockwhile retail investors would stay invested in the national resource.
One could be unsure of retail investors’ appetite for such instruments, but if one was to go by the recent experience of oversubscription of infrastructure bonds, the appetite is nothing short of wholesome.
Alternatively, a holding company owning the coal block could be asked to increase the equity stake offered to retail investors. The holding company can be a listed or an unlisted entity.
In case it is not listed, the government may frame rules requiring compulsory listing and also apportioning a certain representation for retail investors. In case of a listed company, market regulator SEBI could require equity sale to increase the representation of retail investors. The above stated methodologies present a viable option to broad base natural resource ownership and generate a greater degree of awareness about resource ownership and its efficient utilisation.
The recent failed auction for three coal blocks (Jhirki and Jhirki West, Andal Babusol and Tokisud ) where Indonesian coal prices (average of four international coal price indices) were used to arrive at the intrinsic value of the coal block is an apt example of auction process floundering due to unrealistic basis.
The reasons why bidders gave a cold shoulder were pretty plain. When upfront payment and production-linked payment were used as inputs in the coal price model, the cost of coal extraction worked out to be greater than the imported coal cost. The bidders therefore, did not want to undertake land acquisition, environmental/forest permit materialising risk only to find the landed cost of coal being in excess of imported coal, which they could have procured easily in these times of pit bottom international coal prices.
Therefore, to conduct a successful auction, it will be prudent to use domestic, Coal India notified prices so that the upfront payment and floor price are within the bounds of bidders’ expectations.
Finally, it is time we realised that mining is a commercial venture after all. Rules that require any coal miner to be steel or cement producer first are woefully short-sighted. All mining is not captive mining, it shouldn’t be. Companies should play on their core competencies. The resource based view of strategic management may not advocate upstream integration of steel/cement/power producers as mining firms.
Another word of caution at this point is that vertical integration creates a fertile bed for cartelisation. We wilfully nip innovations in mining technology in the bud when we force uninterested steel/cement/power producers to do a job they aren’t best capable of.
The authors advocate that since the government is interested in commercial mining in near future, the present day captive mine owners be given adequate flexibility to transfer the resource to its most commercial viable destination. This would help steel/cement/power firms to gain in business performance. Not doing so may deter the most desired players from participating in this process.
Any company bidding for a block will eventually structure its finance to leverage funds from banks. Commercial banks are also the only holy cows government looks to for financing substantial part of its infrastructure funding requirement. As government goes out prospecting banks to finance smart cities and high speed rail, retail participation in coal block ownership would also lessen bankers’ woes as part of what would have been debt gets converted to equity.
Broad-basing ownership will also lead to diversification of risk. On the other hand, if the project reaps windfall gains, the fruits of labour would be enjoyed by a wider audience.
(Source: Business Line, December 12, 2014)
COAL INDIA RECEIVES FIRST CONSIGNMENT OF IMPORTED COAL OF 1.7 LAKH TONNES FROM INDONESIA
KOLKATA: Coal India’s efforts to import coal have borne fruit after nearly four years, with the first consignment of about 1.7 lakh tonnes reaching Mundra Port from Indonesia recently.
The imported coal, handled by MMTC, will be supplied to Neyveli Thermal Power in Tuticorin and two independent power producers in Punjab — Talwandi Sabo Power and Nawa. The state-run monopoly miner was initially hoping to import about 5 million tonnes of coal for its consumers. However, it ended up placing an order for 0.5 million tonnes due to lack of interest among buyers.
“We had placed an order for some 0.5 million tonnes of coal for four companies — two private and two public sector. Another company had placed a small order with us, but the size was small and it didn’t find any overseas seller. The first consignment of this coal has arrived at Mundra port,” said a senior Coal India official, who did not wish to be identified.
The rest of the ordered volume, about 3.3 lakh tonnes, will be imported during this financial year, the official said, adding, “We hope the import volume will rise as demand for coal rises with more thermal capacities coming up.”
Coal India has been given the responsibility of importing coal on behalf of its consumers to meet the nation’s demand for the fuel. It had decided to place orders only for companies that would pay in advance.
Although 40-50 companies had shown interest in the beginning, only five placed firm orders. The miner spent a couple of years trying to enter into a longterm contract with overseas coal producers in lieu of strategic stakes in these companies. However, this did not materialise as the prices quoted for the coal being supplied worked out to be more than the prevailing market price. Besides, its largest consumer NTPC backed out since it did not want to buy the coal at higher prices than prevailing market price.
NTPC had earlier shown interest in sourcing 10 million tonnes of imported coal through Coal India, but it backed out when the prices quoted were higher.
“The foreign companies were asking for a premium on the market price because they had to commit to 10 years of supply. NTPC did not agree to the premium and the arrangement didn’t work out,” a Coal India official said.
(Source: The Economic Times, December 12, 2014)
IMPORT ORDERS FOR POWER PLANTS CONTINUE TO BURDEN COAL INDIA
NEW DELHI: State-owned Coal India (CIL) has received an order to import around 5 lakh tonnes of coal for the current fiscal, Parliament was informed on Thursday.
“During 2014-15, CIL has received a firm order for import supply to the tune of approximately 5 lakh tonnes. The supply is expected to be completed in the third and fourth quarters of the current fiscal,” Coal and Power Minister Piyush Goyal said in a written reply to Lok Sabha.
The minister had in November said that India should not remain an importer of thermal coal for power plants but on the contrary should be in a position to supply to the world. Goyal told the House that CIL has put in place a modality for importing coal through a PSU supply agency to the willing power plants. “Under the provisions of new Fuel Supply Agreements, in accordance with the Presidential Directives issued to CIL, option is also given to Power Utility sector consumers to opt for supply of a part of the Annual Contracted Quantity (ACQ) from imported coal through CIL…”, the minister said.
In the annual plan for the ongoing fiscal, Goyal said, the country’s demand for coal for power utility sector has been assessed at 551.60 MT (million tonnes) against which supply of 466.89 MT has been planned from indigenous sources, leaving a gap of 84.71 MT which is envisaged to be met through coal imports.
Meanwhile, to improve fuel supplies to power plants, government is working on swapping arrangement of coal which will help save Rs 6,000 crore, government informed Lok Sabha.
Coal and Power Minister Piyush Goyal informed Lok Sabha that coal production has significantly increased in the last few months. Replying to questions, he said government was working on an arrangement under which coal blocks will supply fuel to the nearest power plants, under a swapping arrangement to rationalise coal linkages.
He explained that since coal blocks mostly have arrangements with power plants located far off, it leads to heavy expenses on carriage. This will be addressed through the swapping arrangements between coal blocks.
Citing an example, he said recently NTPC and Gujarat State Electricity Corp entered into a pact for swapping one million tonnes of coal, which is expected to save over Rs 300 crore for the state government.This experiment will then be expanded to other states, he said, adding it will help save Rs 6,000 crore and benefit consumers. Separately, he said that as many as 11 public sector banks have more than Rs 51,000 crore worth exposure to various coal linkages.
Quoting information received from the Department of Financial Services, Goyal said, “11 banks have exposure to the tune of Rs 51,203.96 crore against coal linkages, 10 banks have no exposure, whereas six banks have not given information.” The minister was replying to a query on whether public sector banks grant credit against coal linkages and their details.
Goyal said the new long term coal linkages or Letter of Assurances have not been granted to any sector since 2010 due to low coal production. According to him, availability of fuel was not sufficient to cater to requirements of linkages granted to all power projects.
“The growth in production of coal in India was only 0.2 per cent in 2010-11 and 1.3 per cent in 2011-12 as against 6.1 per cent in 2007-08, 7.8 per cent in 2008-09 and 8 per cent in 2009-10. Hence, the production of coal in the country was not commensurate with the projections of its availability,” he said. Goyal said there were well established procedures for providing coal linkages.
Recently, a case came to government’s attention where the shareholding of the company was changed after it received permission for coal linkage. Subsequently, the government has denied the permission to that entity, he said. He, however, did not give specific details. Responding to another query, Goyal said the larger focus is on providing coal linkages to independent power projects where the electricity tariffs are regulated.
(Source: Millennium Post, December 12, 2014)
DELOITTE YET TO SUBMIT FINAL REPORT ON CIL RESTRUCTURING: GOYAL
NEW DELHI: Consultancy firm Deloitte which was selected to institute a study on restructuring options for state-owned Coal India is yet to submit its final report, Parliament was informed on Thursday.
“Ministry of Coal has instituted a study on restructuring options for Coal India Ltd (CIL) by engaging Deloitte Touche Tohmatsu India Pvt Ltd … The consultant has not submitted the final report after taking into consideration the concerns expressed by the coal companies on the interim report,” Coal and Power Minister Piyush Goyal said in a written reply to the Lok Sabha.
The consultant had submitted its interim report in October which was discussed with coal companies and CIL, the minister said. In the interim report, the consultant had broadly suggested three restructuring options, including reforming holding company and subsidiaries through internal changes in structure, systems and roles and creating independent mega regional companies, Goyal said.
Goyal added that the consultancy firm had also suggested phased creation of independent entities with continuation of holding company during transition.
In the same Interim report, he said, Deloitte had also suggested restructuring model of Central Mine Planning and Design Institute Ltd (CMPDIL), a subsidiary of CIL with the options like “CMPDI as an autonomous body under MoC (Ministry of Coal).
(Source: Millennium Post, December 12, 2014)