Problems pertaining to land and coal availability pose a challenge for the power sector making it difficult to provide electricity at affordable rates, Tata Group Chairman Ratan Tata today said and sought government's intervention in resolving the issues.
"There are challenges which cannot be met by the private sector alone. The government will have to play an important role," Tata said at the 93rd annual general meeting of Tata Power here.
"The main fuel (for meeting the increasing energy needs) will be coal...There is a question on coal and land auction which will be the concern and has to be addressed later," he said, adding, "Availability of energy at affordable rates will be an area of challenge."
The remarks come on a day when official auditor CAG's report was tabled in Parliament saying that the national exchequer lost part of Rs 1.86 lakh crore which private companies are likely to gain because coal blocks were given to them without competitive bidding.
Rapping the government for its failure to timely implement the competitive bidding mechanism for allocation of coal blocks, CAG today said part of the Rs 1.86 lakh crore loss could have been tapped had the procedure been put in place earlier.
Tata Group companies Tata Steel and Tata Power have been named in the report among the companies which got the blocks in various states.
Ratan Tata, who is slated to retire towards the end of the year after being at helm for over two decades, said the principle challenges for Tata Power emanate from land acquisition, environmental clearances and availability of coal.
"There is a shortage of domestic coal and the gas is expensive. There is need to encourage gas-based plants through policy decision. Besides, infrastructure support such as roads, ports and railways should be in place," he said.
The price of imported coal, which has doubled over the last couple of years, will only raise the cost of power generation, he pointed out.
Tata further said that funding is another critical area which needs to be catered to meet the growing demand.
"Since this is a highly capital intensive business, there is a need for easy accessibility to funds. According to government data, nearly Rs 6,28,600 crore will be required to meet the target of 93,000 mw in the 12th plan," Tata said.
Despite the challenges, Tata Power has set itself a target of 26,000 Mw by 2020.
"Our company needs to grow and we will have to face these challenges. Our goal is to grow domestically as well as internationally. We plan to have a capacity of 26,000 mw by 2020," he said.