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New UserFinance ministry seeks report on power plants using imported coal
07 Jul 2016
The finance ministry has sought a presentation on the feasibility of power
projects running on imported coal from the power ministry, expressing concern that cost of
such projects could be subject to changes in law internationally.
"The finance ministry has asked for a presentation on the feasibility of such projects next
week.
It is expected to also raise concerns over the possibility of blending of coal for such
projects," an official close to the development told ET.
The development comes even as the new bidding document of ultramega power projects
(UMPPs) running on imported coal is doing rounds for interministerial consultation.
The power ministry is currently planning to set up an UMPP based on imported coal at
Cheyyur in Tamil Nadu although power minister Piyush Goyal has always maintained the government is against setting up any imported
coalbased power project.
The official quoted earlier said the finance ministry's concern over imported coalbased power projects stems from issues relating to two
projects of Tata Power and Adani Power in Mundra, which needed a tariff revision owing to changes in law internationally.
While the companies had demanded a higher tariff, the Central Electricity Authority Commission and Appellate Tribunal of Electricity had
said it could not be done as the PPA did not have any clause on change in law outside the country. "When PPAs for the projects in
Mundra were signed, they had a clause of only domestic changes in law and nothing outside India.
This led to a lot of trouble for the developers as they demanded higher tariff later," the official said. He said the finance ministry wants to
assure that imported coalbased new UMPPs are cushioned from the changes in law internationally.
Source: ET