Saturday / May 18.


egNEW DELHI: Private power producers have raised several concerns over bidding norms for ultra mega power plants (UMPPs), particularly the design-build-finance-operate-transfer (DBFOT) model where lenders’ exposure to the project is not fully secured.


Under the model, developers are required to transfer the power plant to the government at the end of the contract period, a provision that makes potential lenders jittery.


Last week, Adani Power, Jindal Power and Sterlite Energy pulled out of the bidding process for a UMPP proposed to be set up at Bhedabahal in Odhisha. GMR Energy pulled out of a planned UMPP at Cheyyur in Tamil Nadu.


These companies, and others in the power sector, argued in a recent letter to Piyush Goyal that the DBFOT model “relegates the developer to the status of a BOT contractor after he has brought in finance, technology and other inputs,” adding that the Central Electricity Regulatory Commission had also opined that the DBFOT model was better suited for natural monopoly businesses and not for delicensed businesses like generation.


Under the banner of the Association of Power Producers, the companies said that while the intent of the bidding documents was to ensure that the volatility in fuel prices is passed on to the consumer, this has not been implemented in practice owing to the way the norms are formulated. The contracts, they said, attempted to pre-determine the fuel pricing trajectory over the full project cycle through price caps.


“It is their choice. I do not dictate what companies do. Bidding is an open forum for everybody to choose,” power minister Piyush Goyal said on the withdrawal of private players from the second stage of bidding.


Adani, Jindal Power and Sterlite had purchased the request for proposal (RPF) documents for the Bhedabahal UMPP, and GMR for the proposed Cheyyur plant, after making the cut for the RFQ round. State-owned NTPC now remains the only player in the fray after the withdrawal of these firms.


The companies also told the power minister that the formula to determine the annual fixed cost in PPA should be done away with as the provision will lead to inability to repay debt and maintain a healthy cash flow. They said they felt the technical and operating norms for UMPPs were discriminatory vis-a-vis those for other plants, besides not being aligned to CERC norms. Furthermore, changes have been sought to limit the role of independent inspector to only a few parameters of the plant so as to restrict the intrusive nature of such inspections.


They pointed out that while a procurer utility can terminate its contract with the developer on account of default in 27 events, the developer only has three event of defaults under which a PPA can be terminated with a procurer. The association has sought equity in the termination clause citing that a developer could be dealing with up to 17 procurers at one time, leading to potential misuse of the provisions.

(Source: The Financial Express, October 20, 2014)




NEW DELHI: The Advisory Group, set up under former Power Minister Suresh Prabhu to suggest ways to enhance growth and address regulatory issues in the coal and power sectors, will submit its report to the government by the month end.


“The Advisory Group was given the task of analysing and suggesting measures to address various hurdles in the power and coal sectors,” a senior official told PTI.


The issues include enhancing growth of the coal sector, addressing railway bottlenecks impacting the transportation of the fuel and providing solutions for 24×7 electricity supply.


As per the latest official data, 61 thermal power stations, out of the total 103 projects, are grappling with critical coal shortage with less than a week’s stock at their disposal.


Prabhu was appointed head of this committee in July. The other members of the group are — former Central Vigilance Commissioner Pratyush Sinha, former Home Secretary Anil Baijal and former Coal India Ltd chief Partha Bhattacharya.


Prabhu has also served as the Industry Minister, Minister of Environment and Forests, and Minister of Fertilizers & Chemicals in the previous NDA regime.


According to sources, the group is also likely to soon finalise new methodology for auction of non-operating coal blocks which were cancelled by the Supreme Court.


The Ministry of Coal had said that the policy of coal mines auction and methodology was being revisited by the group.


The apex court had on September 24 quashed the allocation of 214 coal blocks from 1993 to 2010 to various companies saying that they were alloted in an illegal and arbitrary manner and the process was “fatally flawed”.

(Source: The Economic Times, October 20, 2014)




DEHRADUN: The Narendra Modi-led government is following the same policies of the previous UPA regime that “crippled” the power sector, an association of power engineers has said.


At a press conference here yesterday, All India Power Engineers Federation (AIPEF) President Shailendra Dubey said the Centre is still following the same policy of privatising the profits and nationalising the losses in the power sector which is “unacceptable”.


“The total power consumption in the country stands at 2.53 lakh MW whereas it is producing only 1.5 lakh MW of power… We are forced to purchase electricity at exorbitant rates as thermal power plants with a capacity of 20,000-30,000 MW are closed due to non-availability of coal.


“This despite the fact that there is no paucity of coal in the country which stands fifth in the world in storing the resource. All this is the result of the faulty policies of the UPA,” he said.

(Source: The Economic Times, October 19, 2014)




JAMSHEDPUR: Jharkhand Agriculture Minister Banna Gupta said the agriculture department has issued a no-objection certificate in transferring six acres of land to Jharkhand State Electricity Board (JSEB) to set up a 100 MW power grid in Baliguma, near here.


The construction work of the power grid, which was pending since 2010 despite approval, will start within a month time, Gupta said today.


The power grid would be set up at a cost of about Rs 43 crores, he said claiming that the capacity of the proposed power grid could be expanded to 300 MW in future.


Highlighting his achievement within a short span of time, Gupta said he has alloted the land for establishing the power grid what the opposition had failed during there five years tenure including a former Chief Minister from the steel city.


I had promised the people of his Jamshedpur West assembly segment to set up a 133/33 KVA power grid, which I did, he said.


Following the commissioning of the power grid, which will be connected with the Chandil Power, Gupta said Jamshedpur will get round the clock uninterrupted power supply.


Currently, the four sub-stations under Jamshedpur West assembly segments have been getting 50 MW power from Gamariah and Manikui power grids agaisnt the requirement of 75 MW in the peak hours.


All the cables will be laid underground to ensure uninterrupted power supply, Gupta added.

(Source: The Economic Times, October 19, 2014)





NEW DELHI: CBI has registered a fresh case in the coal scam against Jindal Steel and Power in the coal scam, months after it had booked the same company and its owner and Congress Member Naveen Jindal in the same scam, which is under probe.


CBI has not named Naveen Jindal in the present FIR. The fresh case has been registered against Jindal Stripes Limited, Jindal Steel and Power Limited (JSPL) and unknown public officials for alleged criminal conspiracy and cheating under the Indian Penal Code and provisions of the Prevention of Corruption Act, CBI said.


JSPL said it had not flouted the law in any manner.


“JSPL reiterates that all its actions are in keeping with the legal framework of the country & that it complies with the law in letter and in spirit.


JSPL continues to cooperate with all the authorities in a responsive manner,” a JSPL spokesperson said in a statement. CBI said it is the 36th FIR in connection with its probe into the coal blocks scam and searches have been conducted at four locations in Raigarh and Chhattisgarh. “This is regarding the allocation of Gare Palma IV/1 coal block to Jindal Strips ltd and Jindal steel and power limited. Allegations pertain to irregular mining lease beyond approved area, excess coal mining, sale of coal, sale of coal fines and rejects, irregular consumption of coal in new extension plants,” the CBI said in a statement.

(Source: The Economic Times, October 20. 2014)





NEW DELHI: State-owned Coal India has so far signed 162 fuel supply agreements (FSAs) with power plants.


The government had earlier directed the coal major to sign supply pacts with power projects of 78,000 mw capacity. As many as 172 FSAs are to be signed in this regard.


“Out of 172 fuel supply agreements, Coal India has so far signed 162 pacts,” an official said.


The remaining fuel supply pacts could not be signed as some of power producers are yet to achieve milestones like forest clearances, the official said.


The coal ministry had earlier said that CIL was yet to enter into fuel supply pacts with some of the power units as issues like change in ownership and extension of coal supplies were still being examined by it.


Two deadlines set for the signing of FSAs by CIL with the power producers could not be adhered to. The government had set the deadline of August 31, 2013 for signing of FSAs, which could not be met. The second deadline was set for September, last year.


The company, which accounts for 80 per cent of the domestic coal production, dispatched 353.83 million tonnes (MT) of coal to the power sector in FY2014.


CIL produced 462 MT in the last fiscal. It targets an output of 507 MT in the current fiscal.

(Source: The Economic Times, October 20, 2014)





NEW DELHI: Three fund managers are in the race to manage the over Rs 69,000-crore provident fund corpus of coal industry workers, administered by the Coal Mines Provident Fund Organisation (CMPFO). The three contenders are the country’s largest bank State Bank of India, Anil Ambani group’s Reliance Capital Asset Management Company (RCAM) and ICICI Securities Primary Dealership Ltd, according to two officials familiar with the development.


“The three shortlisted companies have agreed to manage the investible corpus at the floor price of 0.01% per annum,” said a senior official with CMPFO, requesting anonymity, adding that only two fund managers will be selected to manage the investible corpus. CMPFO is India’s second-largest provident fund organisation in terms of assets under management.


The total investible funds being administered by CMPFO is worth Rs 69,421 crore, which includes Special Deposit Scheme, 1975 funds to the tune of Rs 16,522 crore, as on March 31, 2014. It has a membership of 4.34 lakh workers.


“No investment management fee will be payable for Special Deposit Schemes,” the above quoted official said. Another CMPFO official aware of the matter told ET that there are some issues with one of the applications, which is being reviewed by a committee.


“The final decision will be taken by the board. We expect to announce the selected fund managers by early next month,” he said, adding that the review is on whether service taxes charges under the overall fee structure can be part of the fee for investment and advisory services.


“The request for proposal (RFP) had the clause that bids above or below the fee cap or floor will be rejected. So, in that context, we are examining it,” the above quoted CMPFO official added. This comes at a time when in 2013, a parliamentary panel had raised objections to CMPFO not parking its funds with the public sector banks and said that the issue of deviation from norms should have been referred to a central investigating agency.


The panel headed by Trinamool Congress MP Kalyan Banerjee had asked the coal ministry to take adequate safeguards to secure the safety of investments that are vested with fund managers after raising objections that Commissioner CMPFO had acted beyond his delegated powers by extending the tenure of fund managers without taking approval of the Board of Trustees (BOT).

(Source: The Economic Times, October 20, 2014)


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