Wednesday / December 4.


egBANGALORE: State-run power generator NTPC is awaiting forest department clearance to set up its first wind energy project in the country.


The 100-MW project, with an estimated cost of Rs. 650 crore is to come up at Guledagudda in Bagalkot district, Karnataka, said R Venkateswaran, Regional Executive Director (South).


A few months ago, the company floated tenders but was not successful, and now it is again making efforts to float tenders once all the clearances are in place.


Talking about its super thermal power project at Kudgi in Karnataka, Venkateswaran said: “We have set a deadline of May 2016 to operationalise its first unit (800 MW). The remaining two units are likely to be commissioned with an interval of six months subsequently.” For the first phase of the Kudgi plant, the company has already tied supply of 13 million tonnes coal a year, and is now awaiting allocation for the second phase (1,600 MW).


Of the Rs. 15,166-crore investment proposed in the first stage, NTPC has spent Rs. 5,900 crore till September.


Regarding the other ongoing facilities in the southern region, NTPC is working on a 500 MW plant at the Vallur thermal power project in Tamil Nadu, whose commercial operations will begin in December and a 15-MW solar PV project in Ramagundam. In all, the company is planning to add 4,500 MW and the projects are under various stages of implementation. “This apart, the company has also envisaged new projects to generate 10,050 MW, which include 1,000 MW solar PV facilities in Andhra,” said Venkateswaran.

(Source: Business Line, October 30, 2014)





MUMBAI: Indiabulls Power plans to bid for coal blocks being auctioned and has no plans to bring in a strategic partner or to sell stake as it hopes to grow organically, CEO Rajiv Rattan has told ET. “We are keen to bid in the new coal auctions as unlike before, we are now certain of a transparent and fair process of allotment,“ Rattan said.


The company’s shares rose 45% last month, helped by a report from brokerage Motilal Oswal, which gave a `buy’ recommendation due to “compelling“ valuation. Rattan said the company had not taken a coal block but ensured proper fuel supply, making it perhaps the only listed power entity that was not hit by the Supreme Court’s order cancelling allocation of coal blocks.


Rattan said speculation about selling stake was baseless. “There is no truth Rs 360 crore of to these talks, I have put in ` my own money into the company, which is a clear signal that we are not planning to sell or bring in any strategic investor right now, I am clearly not looking at exiting this company or feel the need for a strategic investor currently,“ said Rattan.


Rattan took control of the group’s power companies after buying out copromoters Sameer Gehlaut and Saurabh Mittal’s stakes in Indiabulls Infrastructure and Power. He then infused fresh equity amounting to Rs 360 crore into Indiabulls Power through his private company. These transactions were a part of an overall restructuring process that the entire group underwent recently.


Markets, on the other hand, were drawing their own conclusions, especially last month when shares rose on speculation about an imminent stake sale. Some experts that tracked the company closely said they expected the company to be sold off completely in the near future as the promoters had split and it does not make financial sense for a single promoter to run it. Since September 19, the stock has seen an average upside of 5%.


“I completely deny these conclusions and there is no truth to them, as I have spent considerable money to completely own the business, which I am very bullish about as we have very clear differentiators. As unlike others, I opted for coal linkages rather than owning coal blocks, thus, we are one of the only listed power companies that is not impacted by the recent Supreme Court order that de-allocated coal blocks allotted to private companies,“ Rattan added.


“Also, the compensatory tariff of Rs 1.55 per unit that the Maharashtra Electricity Regulatory Commission has allowed using imported coal as pass imported coal as pass through for our plant at Amravati could add Rs 1,700 crore as EBIDTA and Rs 500 crore as PAT in the coming fiscals,“ said Rattan.


Earlier this month, the company roped in Jayant Kawale as its new managing director. A former IAS officer, Kawale was earlier managing director at Jindal Power.


Indiabulls Power is developing 2.7 GW of projects in Maharashtra, 1.35 GW each at Amravati and Nashik. Of these, it has already commissioned three units of 270 MW each (two at Amravati and one at Nashik) and its current operating capacity stands at 810 MW.


The second unit at Nashik is scheduled for commissioning in 3Q FY15, which will take its operating capacity to 1.1GW.

(Source: The Economic Times, October 30, 2014)




KOLKATA: Power utility CESC (formerly Calcutta Electric Supply Corporation) has opened the offer for private placement of shares to institutional investors from October 28.


According to a release to the bourses on Wednesday, the company has fixed a floor price of Rs. 677.84 for the qualified institutional placement.


A discount of 5 per cent can be provided on the floor price of the equity shares at the discretion of CESC. The power utility had said it was looking to raise Rs. 915 crore ($150 million) through the offer.


CESC is the flagship company of the RP-Sanjiv Goenka Group.


On Wednesday, the shares of CESC ended at Rs. 659.05, down 0.84 per cent, on the BSE.

(Source: Business Line, October 30, 2014)





CHENNAI: US company First Solar has emerged the lowest bidder in the 500 MW solar tender for Andhra Pradesh, quoting Rs. 5.25 a kWhr for 40 MW and Rs. 5.35 a kWhr for another 40 MW. First Solar is mainly a module manufacturer — it is the world’s largest producer of cadmium telluride-based thin-film modules. The company also owns solar plants all over the world, but mostly in the US. It is among the leading module suppliers to solar project developers in India, catering to this market chiefly from its plant in Malaysia.


In India, First Solar recently announced the setting up of a 45 MW plant in Andhra Pradesh. And it is now the lowest bidder in the State government tender.


The second highest bidder in the auctions was Acme Power, a company financially backed by Electricite de France. Acme quoted Rs. 5.63 a unit. Acme is the largest solar power plant owner in India, with a capacity of 422 MW. Andhra Pradesh is now the most happening place for solar in India, with the government announcing 1000 MW of projects, as part of its ambitious ‘15000 MW by 2019’ plan. Part of the 1,000 MW will be put up by public sector power major, NTPC Ltd.

(Source: Business Line, October 30, 2014)





NEW DELHI: The government is likely to issue at least a dozen sets of rules before starting the e-auction of coal blocks, promised under an ordinance of last week.


In the first phase, 74 blocks would be auctioned. The Supreme Court, on September 24, ordered cancellation of allocation of these blocks — 42 operational and 32 in line to start production — from April 1, 2015. These mines would now be offered only to developers with projects in notified end-use such as steel, power, cement and coal washing.


With the Coal Mines (Special Provisions) Ordinance empowering the government to work out the nitty-gritty, it would not need to wait for Parliament to replace the ordinance with a new law. The target is to start auctioning of blocks from December, said a senior government functionary. The process of notifying rules would take place along with the introduction of a Bill in Parliament, so that the way out of the impasse was not delayed.


To ensure legal and procedural transparency, the ministry of coal has planned an auction on the lines of what has been held in the past for telecom spectrum.


It has got in touch with the department of telecommunication for the expertise. Earlier, cancelled spectrum licences were re-allocated through a transparent e-auction process, visible on public domains.


“It would be a transparent process and we are looking to make the information publicly available. The whole point is to make the sector attractive for investors again and minimise the blocks,” said a senior government official.


The steps for a public auction are being worked on. It would include determination of a floor price, valuation of assets that would need to be transferred, collection of levy charges on the prior allottee and disbursement of compensation. And, the nominated authority in charge of the auction process would be empowered.


The rules would also look at transfer of operation and management of producing mines and use of coal by the successful bidder for notified end-use.


The SC judgment of August 25 had said the blocks’ allocation process by a screening committee for 1994-2013 was ‘illegal’, ‘unconstitutional’ and ‘without application of mind’.


In the first step forward, a committee has been set up under ex-Central Vigilance Commission chief Pratyush Sinha to evaluate the value of the land in question and other assets. The coal ministry would decide the reserve price of coal on the basis of international market prices when the auction commences. It would amount to 10 per cent of the value of coal reserves in a mine.


Compensation to the prior allottee would be decided on the value of land and other assets which are part of the mining infrastructure.“The final bid amount would be a total of coal reserve price and asset value. After paying the compensation to the prior owner, the balance revenue would go to the states,” said an official.


The ordinance also provides an option for negotiation between the successful bidder and prior owner, for transfer of assets and mining infrastructure.

(Source: Business Standard, October 30, 2014)




NEW DELHI: The government would introduce a Bill in Parliament for setting up an independent watchdog for the coal sector and likely task it with determining a mechanism to price the fuel and specify methods to ensure supply of quality coal to the country’s power and steel plants.


Setting up a coal regulator was an unfinished agenda of the erstwhile UPA government. It did introduce the Coal Regulatory Authority Bill 2013 in the Lok Sabha in December last year. But with the dissolution of the House, the legislation could not be passed.


The present government has decided to draft a Bill after extensive consultations with the stakeholders like coal and power ministries, end users of the fuel and industry houses and then seek the Union Cabinet’s approval before tabling it in the Lok Sabha in the Winter Session.


At a meeting on October 24, top coal ministry officials decided to wind up the consultation process with stakeholders early to approach the cabinet next month to seek its approval on the draft bill, a source privy to the meeting said.


What would differentiate the fresh legislation from the earlier one is that the proposed regulator may be conferred powers to determine a mechanism to price the fuel, which the earlier government had opposed on the plea that it would collide with the coal ministry’s powers in having a say in pricing of coal.


But considering that the power companies have been consistently asking the government to disallow “profiteering” by a “monopolistic producer” like Coal India, the NDA government is keen to allow the proposed watchdog to do so without itself being a party to it.

(Source: The Indian Express, October 30, 2014)




NEW DELHI: Coal minister Piyush Goyal’s high-cost, high-decibel campaign to recruit a private professional to head state-run Coal India Ltd may have fallen flat with just one private sector executive applying until close of application submission on Wednesday.


Sources said eight people had applied of which six are from public sector undertakings Coal India and Neyveli Lignite Corp, an Indian Administrative Service officer and one from a private investor firm.


Not much is known of the private sector applicant except that he works with Maharashtra-based Amit Brokers.


Goyal delayed the selection process of Coal India chairman-cum-managing director by almost five months and forced Coal India to run an ad campaign amounting Rs 1.44 crore in leading dailies to rope talent from private sector to professionalise operations of PSUs under his administrative control.


He had planned to replicate the Coal India selection process in other power (which he also heads) and coal PSUs that are awaiting appointments of their respective chiefs.


His rationale for an extensive search was to bring about more competitive spirit and a larger pool of talent to improve the PSU efficiency.


On his insistence, the Prime Minister’s Office opted for a Search-cum-Selection Committee to choose the Coal India CMD while retaining the appointment process to be conducted through PESB, the usual recruiting government agency.


As a one-time consideration, the PMO agreed to allow private sector professionals and officials from state PSUs to apply for the job after a ban in April 2013 which forbid the two pools from applying.


The Coal India post was advertised on September 29 even though it has been vacant since May-end when S Narsing Rao resigned. AK Dubey, additional secretary in Coal Ministry, is officiating until a full-time chief executive is appointed. Absence of a full-time CMD is hurting its decision making process as Coal India has been unable to take quick decisions to operationalise its mines to meet the growing coal demand.


The appointment has become important in wake of Supreme Court’s cancellation of almost the entire captive coal block allocations. Most of these blocks may now come to Coal India to maintain their operations.

(Source: The Indian Express, October 30, 2014)





KOLKATA: First, Union Coal Minister Piyush Goyal curbed e-auction sales of coal, triggering protests from transporters. Now, to pacify the protestors, Mahanadi Coalfields Ltd (MCL), a subsidiary of Coal India, is moving a part of its supplies under the fuel supply agreements, via road. This may lead to a rise in coal prices, say sources.


“All consumers of Mahanadi Coalfields who have a fuel-supply agreement (FSA) with the company will have to transport 30 per cent of the FSA quantity by road if the destination point is within 50 km from the mines,” the Sambalpur, Odisha-based company said in a release.


Earlier, the Government’s decision to curb e-auction sale of the fuel had prompted transporters to threaten to stall mining operations in Odisha, which produces a quarter of the country’s total coal output. The truckers fear loss of business if the e-auction quantity is reduced. Coal sold through the e-auction route is moved via road, while those with FSA get it by rail, on captive lines or through the Railways. The truckers want either the open market sales restored or a share of the rail traffic.


MCL’s move to transport FSA coal via road is contrary to the prescriptions of the Union Environment Ministry.


Throughout the last decade, the Environment Ministry has been insisting on rail movement of coal as a pre-condition to grant green nod to mines so as to curb air pollution in the mining districts.


But MCL sources say the initiative, which has the backing of the Coal Ministry, will protect annually 12-18 mt of road cargo that was lost due to curbs on e-auction.


“This scheme saw the light of the day due to active support from Coal India and the Ministry of Coal,” the release said. The arrangement, however, will trigger a sharp rise in the landed cost of coal being supplied under the FSAs, say sources. The e-auction coal was largely sold to numerous ferroalloy makers in the vicinity, each consuming limited quantities, making it suitable for road movement.


Large companies like Bhushan Power and Steel, also participated in the auction as a stop-gap arrangement till their captive mines were ready. They were buying coal at Rs. 3,000 a tonne from e-auction and paid Rs. 600-900 a tonne as road freight.


But FSA consumers such as Vedanta, Hindalco Industries are drawing huge volumes at an average price of Rs. 800-850 a tonne (ex-mine) with the fuel being moved by rail at Rs. 150 a tonne. Under the new arrangement, they have to pay more for transportation, which will increase the landed cost of the fuel, sources added.

(Source: Business Line, October 30, 2014)

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