Divert coal set for e-auction to us: power majors

Faced with acute fuel scarcity, private power producers, including Reliance, Adanis and Tatas, have suggested to Prime Minister Manmohan Singh that the coal set side for e-auction be diverted for power sector at notified prices.

The Association of Power Producers (APP) came up with detailed suggestions to address multiple woes plaguing the sector, just days after chiefs of private power companies met the Prime Minister on January 18.

"To meet the current [fuel] deficit situation, e-auction coal should be diverted for the power sector at notified prices [to avoid tariff shocks]," APP said in a communication to the Prime Minister's Office (PMO).

APP members that include Adanis, Reliance, Tatas, Essar, Lanco and GMR, account for over 95% of the power capacity in the private sector.

Coal India (CIL), which accounts for over 80% of domestic coal production, sets aside about ten% of the fuel annually for e-auction, which also fetches good returns for the state-run company.

CIL raked in about Rs 8,800 crore through e-auction sale of coal in the last fiscal.

Shortage of coal is expected to hurt new capacity addition plans of power companies to the tune of 15,000 MW in the current fiscal.

"Available coal should be equally distributed to all the plants against FSA/Letter of Assurance/MoU instead of old plants with less efficient operation getting 100% coal and newer, more efficient and higher sized power critical units getting deprived of coal," the communication said.

As per the communication, the private power producers have also suggested that domestic coal should be reserved for regulated sectors such as power and fertiliser.

In August last year, a parliamentary panel had said that coal availability for power plants designed to run on indigenous coal would be only 417.5 million tonne in the current fiscal, as against the requirement of 480 million tonne.

The government has set up a Committee of Secretaries -- headed by Principal Secretary to the Prime Minister Pulok Chatterji -- to look into the problems faced by the power sector.

The move followed the Prime Minister's meeting with top executives of private power companies.