Coal news and updates

Working on contingencies to provide power: Piyush Goyal

After being voted the best minister in Modi government’s first year, coal and power minister Piyush Goyal is now gearing up for a second wave of reforms in the sector. With the Indian Meteorological Department suggesting a below-normal monsoon season, Goyal says hydel power production will be impacted by the same. However, he says the ministry is working on contingencies to ensure there are no power outages. "We have provided far more proactively. There is adequate coal at every thermal power plant. We have also kept coal with the pit-heads. Production of coal in the first 61 days of this year is up by 11.8 percent which I would believe is record by itself. So, we have enough coal on hand. We will bump up the thermal generation. We look at pit-head plants producing more power," he adds. Furthermore, Goyal says the ministry is ready to divest more stake in state controlled Coal India in order to abide by Sebi’s norms. The timeline, however, is not decided yet, he adds. The government raised Rs 22,557.63 crore from the sale of its 10 percent shareholding in Coal India (CIL) in January 2015.

Q: Will hydel power get affected due to a below-normal monsoon?

A: Hydel power will certainly get affected and it did get affected last year also. But if you recall, last year in the June, July, August period, monsoon period when hydel was down, coal had bumped up its production to nearly 13-13 and a half percent growth and we were able to ensure that throughout the country there were no power shortages or outages. Even this year, we have in fact provided far more proactively there is adequate coal at every thermal power plant. We have also kept coal with the pit-heads. Production of coal in the first 61 days of this year is up by 11.8 percent which I would believe is record by itself. So, we have enough coal on hand. We will bump up the thermal generation. We look at pit-head plants producing more power.

Q: Can we expect your ministry to push for a further disinvestment as far as Coal India is concerned because obviously the fundamentals for the company certainly looks a lot better. You helped the finance ministry sure up its disinvestment revenues last time around. Will you come to the finance minister’s aid this time as well?
 
A: It is not about coming to his aid. It is a requirement of SEBI that Coal India should be 75 percent maximum.

Q: You are currently at about 79 percent.

A: So, there is some requirement of SEBI which we have to fulfil. The exact timing is up to the Honourable Finance Minister and the disinvestment department. We have an absolutely open mind on that.

Q: Could it be this fiscal? Is that what you are targeting?

A: Maybe, but there is no timing decided as yet. We have an open mind, we look at market conditions, we look at the requirements of the Feds. And in the overall context we have to maximise the values for the government of India.

Q: When should we actually expect to see results as far as commercial coal mining is concerned?

A: We still have to see the extent of preparedness of various mines as mines keep coming up which are explored and have the requisite clearances and we are able to take them out for auction. We had announced at the beginning that our first priority is to meet the end-use requirement. Commercial mining would come at a later stage.

Q: You spoke about bringing in transparency into the auction process and that is one of the reasons why your ministry has been rated as highly as it has in the poll that we conducted but one of the issues that is now being talked about is the issue of discretion especially when it comes to capping of fixed costs because the matter has now gone to court, as you are aware Mandakini Power, that is the joint venture of Jindal India thermal and Monnet power have moved the Delhi High Court and they view this post auction tariff cap that you have brought in as ex post facto or retroactive changes. The matter is sub judice so I don’t expect you to comment on this specific issue but is there a view within the ministry now on how to address this issue because several other players are also talking about how this is going to impact viability, how banks are now not lending money to power companies at this point in time given the fact they could be under severe burden?

A: First of all there is nothing ex-post facto or a after thought in this. Let me be very loud and clear- on your own channel on more occasions than one, one several channels, several press briefings, in pre-bid meetings with the bidders, on the floor of parliament, both houses of parliament, we have ad nauseam repeated and you are well aware of that that all the reduction in prices will have to be passed through to the consumer. Through, a very clear understanding it was explained. The bidding documents state that the standard bidding documents for purchase of power will be suitably amended. I may not remember the exact wording but you are welcome to look up the bidding document, the tender document. Will be amended to make sure that consumers get the benefit of whatever is the advantage they are getting. It was a loud and clear announcement. Everybody knew it. Now, all that they went to the court was that they wanted a clarification on this particular scope. When they have flagged it off to us and in the court they made a statement that they have assumed that they can pass on the amount they have foregone in the coal auction to the innocent consumers through loading it on the fixed charge. We have exposed their mine to their own intention to deceive the process that we had to set out in the first place.

Q: So, there is no reconsideration?

A: Absolutely no question. I would be being unfair to the people of India whom I had promised that this will be a benefit that will be passed on to the consumers. All bidders came in with their eyes wide open.

Q: But, do you at least take on board the concerns that are being expressed by industries saying banks are unwilling to lend because of the future viability as far as the projects are concerned.

A: I do not think bidding is ever done on assumptions. When a government is explaining loud and clear that look whatever you are bidding, you have to pass through to the consumer. We are also saying that whatever additional amount you are giving if should it come down to zero, if you are going above 100 and bidding forward after that, you are not going to be allowed to charge that to the consumer. When both these things are known, how can anyone assume that they will do something which is blatantly and obviously against the spirit of what we had announced?

source: http://www.moneycontrol.com