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Higher cost of imported coal set to push up power bills
New Delhi, June 21 Finance Minister P Chidambaram said there would be a small increase in the power tariff, depending upon the cost of imported coal. It would go up by at least 15-17 paise per unit. As several power projects are stuck due to lack of coal supply, the Coal India will sign a fuel supply agreement (FSA) for ensuring 78,000 mega watts of power capacity and guarantee 65 per cent of it this year to 75 per cent by the end of 12th Plan in terms of coal supply. The remaining portion will have to be imported, thus increasing the power tariff. The actual coal supplies would, however, commence when long-term power purchase agreements (PPAs) are signed. The CIL may import coal and supply the same to the willing thermal power plants (TPPs) on cost-plus basis or they may import it themselves. Chidambaram said this would kick start several stalled projects and it was better to have power and pay a few paise more than not have power at all. “It is better to have our power plants working and producing power than keeping them shut down after investing thousands of crores,” he said. Chidambaram indicated further economic measures soon, including enhancing coal mining, hiking sectoral FDI caps and gas price revision. The CCEA also approved the proposal for an exit clause for developers in national highway projects. This will expedite implementation of road infrastructure in the country and insulate the National Highway Authority (NHAI) from heavy financial claims and unnecessary disputes. In view of the prevailing lack of interest among prospective bidders for highway projects under the PPP mode and difficulties faced in achieving financial closure for such projects awarded in the recent past in an already subdued investment climate, it has been decided that existing developers, both in case of completed and on-going projects, be permitted to divest their equity in totality. This would bring about required flexibility for existing concessionaires in terms of exit options. Among other decisions was the divestment of 5% government stake in Neyveli Lignite out of its current holding of 93.5 per cent through the offer-for-sale route in the domestic market.
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