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Captive Power Producers oppose Coal ministry move to scrap fuel linkages

Captive power producers (CPPs) have opposed the proposal of Coal ministry to do away with coal linkages for such units.

The Indian Captive Power Producers' Association (ICCPA) feels this retrograde step will blunt the competitive edge of CPP based industries that have grounded huge investments in the last two decades.

Coal based CPPs with capacity of 41,000 Mw that have invested more than Rs two lakh crore are set to be jeopardised if the proposal takes effect.

Besides, the move is also seen to affect investments of the order of Rs 65 lakh crore in related industries.

As per the proposal, non-IPP (independent power producers) coal linkages maturing before July 1, 2016 will not be renewed and the linkages after this period would be terminated. The Coal ministry has also proposed to put up all coal linkages for auctions.

ICPPA has written to Coal minister Piyush Goyal, stating that existing coal linkages should not be discontinued abruptly since coal prices under linkage are already 35 per cent higher for CPPs than other producers.

source: http://www.business-standard.com