Several states have made a fresh appeal to the Centre to expedite coal sector reforms and streamline the allocation of coal blocks.
Maharashtra has asked for a regulatory and pooling mechanism on a priority basis to moderate the rising prices of coal. “The Maharashtra government has argued that there is an urgent need to devise a mechanism to pool the costs of domestic and imported coal and moderate the effects of distance from coal mines through a regulatory mechanism so that there is no lop-sided increase in tariff in the state. Coal prices in Maharashtra had increased by 11 per cent in 2008-09 and 18 per cent in 2009-10, forcing a tariff rise of about 14 per cent in the last financial year,” a senior power ministry official told Business Standard.
The official said Andhra Pradesh and Tamil Nadu have also pitched for coal sector reforms. Andhra Pradesh has argued that incremental measures to enhance coal production would not suffice, and thus, called for radical changes in the reforms. On the other hand, Tamil Nadu has called for a service tax waiver on coal.
Besides, many states have brought to the Centre’s notice that power companies have declared the grade of coal they receive as below par mostly, which has left serious financial implications on generation companies. Gujarat has argued that the current system of annual contracted capacity for coal supply, based on actual dispatches of the earlier years rather than on fuel supply agreement, was retrograde and does not allow for improvement in the plant load factor.
The state government has asked the power ministry to facilitate allocation of adequate coal for existing power plants based on fuel supply agreements. Moreover, Orissa has cited that the allocation of coal blocks and coal linkages continue to the most hindering factor for delay in the implementation of generation projects. The state government has called for speedy allocation of coal blocks and linkages.
