Tata Power chairman Ratan Tata on Wednesday said they were seeking a higher rate for supply from its under-construction 4,000 Mw ultra mega power plant at Mundra in Gujarat’s Kutch district. It is in discussion with the Union government on this.
The revision is being sought due to changes in Indonesian government policy on export of coal from that country, that has pushed up the fuel cost. Mundra is supposed to use Indonesian coal.
Addressing the company's annual general meeting, Tata said he did not blame the Indonesian government for benchmarking exported coal to commercial rates.
Answering queries from shareholders, he said rate revision apart, they were examining options. One was to set up a power plant in Indonesia itself, if the Mundra revision didn’t happen.
Tata Power managing director Anil Sardana said alternatives, if the Mundra revision didn’t happen, included experimenting with low-grade coal from various sources, to keep the plant running. “We are already doing this at our Trombay power plant,” he said.
As for setting up power plants in Indonesia, “If there is lesser meaning in bringing the coal back here, we might use it there,” Sardana said. Tata Power owns 30 per cent stake in three coal mines of Bumi Resources in Indonesia.
On the likely impact of this issue on the stock price, Tata said, “We are taking up the issues with the government and the share prices will stabilise once there will be a solution.” The stock fell 4.5 per cent on Wednesday to Rs 1,036 a share on the Bombay Stock Exchange.
Tata also answered queries on the company’s Mumbai distribution business, where shareholders asked about continuing to use Reliance Infrastructure’s network for supplying power. “We have regulatory advice to use the existing wires for wheeling power. We are not doing anything that the law does not enable us to do,” Tata said.