Power industry delegation to raise concerns over fuel crunch with Scindia

Mistry, Ambani, Chanda Kochhar among the 22-member advisory panel

Power sector heavyweights like Tata Group chairman Cyrus Mistry and ADAG chairman Anil Ambani along with top bankers will meet power minister Jyotiraditya Scindia on Tuesday to discuss issues hurting fresh investment running into lakhs of crore in the sector. This will be the first meeting of a 22-member advisory panel for the power sector.

Among the issues which are likely to figure in the discussion are streamlining of fuel availability for a cumulative 90,000 Megawatt (MW) power capacity, a review of National Tariff Policy and coal price pooling. "In addition, we will highlight the need for the proposed coal price pooling mechanism to ensure 28,000 MW of existing and 38,000 MW of upcoming coal-based capacity is able to operate at optimal levels," a member of the group told Business Standard. Besides problems relating to coal availability, 24,000 MW of gas-based capacity set up entailing private investment worth Rs 1 lakh crore has become inoperable owing to scarcity of domestic gas.

The panel was set up earlier this month and comprises GMR Group Chairman G M Rao, Adani Group Chairman Gautam Adani as Chairman of Association of Power Producers (APP), Torrent Group Chairman Sudhir Mehta, Kalyani Group Chairman Baba kalyani, JayPee Group Chief Executive Officer (CEO) Manoj Gaur, State Bank of India Chairman Pratip Chowdhury, ICICI Bank Managing Director (MD) & CEO Chanda Kochhar, McKinsey & Co Partner Vivek Pandit, Chairmen of Powergrid Corp and Bharat Heavy Electrical Ltd (BHEL), Feedback Ventures Chairman Vinayak Chatterjee and TERI Director General R K Pachauri.

The delegation member also added that the private developers will ask Scindia to provide solutions for the issue of fuel crunch as both the coal ministry and the oil ministry have already expressed constraints on supply of coal and natural gas for power plants. The power producers are also likely to suggest that the National Tariff Policy has outlived its utility and needs a drastic overhaul to take into account use of imported coal and gas on retail tariffs.

In addition, the advisory panel will also raise concerns over the provisions of the Standard Bid Documents for power projects which are currently being reviewed by the government. The industry wants, in the new SBDs, provisions to take into account impact of change in law in coal exporting nations and addressing material adverse conditions through an enabling provision for review of contract conditions.

In industry fears that due to availability of less concessional coal (supplied by Coal India) under the proposed structure, the power utility stands to lose owing to lower availability. The Central Electricity Regulatory Commission (CERC) had also recently told the ministry that the SBD document would lead to disputes in the future.