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Budget 2014: Govt should take steps to ramp up coal production, says IPCL

The government should take measures in the Union Budget to ramp up coal production in the country, India Power Corporation Ltd today said.

"Without stepping up coal production domestically, providing incentives for increasing generation capacity will be futile as that would have a chain impact of running power plants at sub-optimal load factors, power supply being erratic and cost of power remaining high," IPCL Chairman Hemant Kanoria said in a release stating his Budget wish list. ..

"On the generation front, the shortage of coal is essentially artificially created. Mechanisation and productivity of Coal IndiaBSE -1.30 %, a monopoly, is abysmally low," Kanoria said.

He said that distribution reforms would determine the viability of the entire power sector in the country.

"It is worthwhile to adopt a 'carrot-and-stick' policy so that discoms (distribution companies) which are able to reduce their ATC losses are rewarded by the government in terms of support to tide over their losses," he said.

Meanwhile, ICRABSE -0.53 % Senior VP and CO-head, corporate sector ratings Jayanta Roy said in a separate release that government should take steps for an improvement in evacuation facilities and removal of logistical bottlenecks, including assurance of higher wagon availability and better connectivity between coal mines and end user plants.

"Roadmap for private and foreign participation in domestic coal mining is needed," he added.

Source: PTI