Coal news and updates

Coal power generating companies form new group

Private power firms, which put up a united front to combat fuel scarcity, policy uncertainty and procedural hurdles, are now a divided lot with some corporate leaders such as Naveen Jindal and Anil Agarwal breaking away from the Association of Power Producers (APP) which has many prominent members such as Anil Ambani's Reliance Power and Tata Power.

The association had taken the lead in persuading the government to act after investment worth thousands of crores of rupees was at risk due to a vast range of problems facing the sector. But now, Jindal Steel & Power Ltd, Agarwal's Sterlite IndustriesBSE 2.79 % and Sandeep Jajodia-owned Monnet IspatBSE 1.17 % and others have floated a new association known as the Domestic Coal Based Power Producers Association and are withdrawing from the APP.

The new association alleged that APP was catering to the needs of a few big groups like Tata PowerBSE 0.05 % and Reliance Power. Industry sources said there have been occasional disagreements within APP but the association's reluctance to take up some captive coal related issues with the government irked a few firms that decided to break away.

"The companies had asked APP to intervene when the government barred captive coal companies from selling power in spot market. The companies were of the view that the government can't make retrospective amendments but APP cited the Supreme Court order saying coal is a scarce natural resource," an industry insider said.

Source: The Economic Times