Centre announces steps to augment coal supply to power plants

The government on Friday announces steps to remove investment hurdles in power sector by ensuring availability of coal by reducing quantity at Coal India's e-auctions, rationalising coal linkages and allowing transfer of surplus coal from captive mines to Coal India Ltd.

While a reduction of the quantum of coal at e-auctions would make more coal available for supply to power plants, rationalising existing coal linkages would help save rail freight costs and free rail capacity, minister for power, coal and renewable energy Piyush Goyal said on Friday.

At the same time, he said, Coal India would be asked to provide fuel linkages for commissioned plants. Besides, in order to augment supplies, the environment ministry's help will be sought for additional production from operational mines.

He also proposed third-party inspection of coal dispatches at the loading end and setting up an inter-ministerial panel to discuss issues connected with coal mining and dispatches.

The announcement was made at a meeting with representatives of major power producers, including Reliance group chairman Anil Ambani, Adani Enterprises chairman Gautam Adani and Jindal Steel and Power (JSPL) chairman Naveen Jindal.

''We want to focus on providing fuel to all operational projects. The view taken by everyone present today was a national asset that has already been created has to be protected. We will look at all investments in the power sector as national assets,'' Goyal said, addressing the media after the meeting.

The industry leaders told Goyal there were viability concerns about projects with a capacity of about 39,000 Mw, already commissioned or to be commissioned soon, with an overall investment of Rs1,57,000 crore and debt of Rs1.10,000 crore, which posed risks to the banking sector.

In addition, about Rs1,20,000 crore investment in 24,000-Mw projects in the gas-based generation sector is laden with debt to the tune of Rs85,000 crore, they pointed out