GOM to meet on power sector woes, PM offers help (Lead)

January 18th, 2012 - 10:54 pm ICT by IANS  

Manmohan Singh New Delhi, Jan 18 (IANS) A delegation of independent power producers met Prime Minister Manmohan Singh Wednesday and sought his intervention on problems hurting the power sector.

The prime minister assured them that their problems would be taken care of in a time-bound manner and directed various ministries to come out with an action plan on the issue, the Association of Power Producers (APP) said after the meeting.

The association consists of 21 power producers, which account for over 95 percent of power capacity in the private sector.

APP said a co-ordination committee under Pulok Chatterjee, principal secretary to the prime minister, would be formed to address the problems. The committee will meet every week.

A group of ministers (GoM) would also meet on the issue soon, it said.

The association also raised the demand for import duty reduction on foreign power equipment and allocation of more gas from non-core to core sectors.

The issues confronting the companies include fuel shortages, pricing related to imported coal for power projects, delay in environment and forest clearances, funding problems and worsening health of power distribution companies (discoms).

In a day-long exercise to apprise the government of the problems they are faced with, chiefs of private power companies met the Coal Minister Sriprakash Jaiswal and Planning Commission Member B.K.Chaturvedi.

They included Reliance Group chairman Anil Ambani, Tata Sons’ vice chairman Cyrus Mistry, Jindal Steel and Power’s Naveen Jindal, Essar Group’s Prashant Ruia, GMR’s G.M. Rao, Gautam Adani of the Adani Group and Lanco Infratech vhairman Madhusudan Rao.

“They (power producers) have a lot of issues, gas and coal related, power ministry. So, regarding these problems, Prime Minister Manmohan Singh is meeting the company heads of these private power companies in the evening,” Coal Minister Sriprakash Jaiswal told reporters earlier.

Rejecting private players’ proposal for pooling in of domestic and international coal prices that will be shared by all firms, Jaiswal said: “For thermal power production, coal is required. They (power companies) had suggested that the pooling of prices should be done and the burden would be shared by all the power producers, which is not possible.”

According to Jaiswal, the coal ministry would look at enhancing the minimum quantity that coal companies have to supply to plants. Under the current fuel supply agreement, the minimum threshold that coal companies have to adhere to is 50 percent of the total agreed quantity.

“One of their (power companies) problems was the signing of the FSA (fuel supply agreement). They had asked to increase it from 50 percent. We will talk to the power ministry and if they agree we may take it to 65-70 percent.”

If coal suppliers do not adhere to this minimum threshold, they can be penalised.

Earlier in a proposal, the power ministry had pushed for a guaranteed 90 percent of fuel supply for all thermal power projects which were commissioned or were to be commissioned between April, 2009, and March, 2012.

Fuel shortage due to stagnant domestic coal output, lower gas output and environmental clearances have held up some of India’s biggest power projects. India has a 12 percent power deficit in the peak hours.

Environment Minister Jayanthi Natarajan said the companies will have to adhere to the current policy.

“Within my mandate to protect the environment, our policy will be to have consistent, transparent guidelines,” Natarajan told reporters.

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