Exponential increase in land prices raises cost by . 2,690 crore

Some 36 coal projects with estimated production capacity of 17.7 million tonnes per annum at the public sector monopoly Coal India turned unviable in Maharashtra because land prices have increased exponentially. CIL has shelved these projects and may take them up only if it can get a price that covers production cost from these proposed mines. “Coal price from these projects will rise by as much as 100% if we have to cover the cost of production,” said CIL officials.

Coal India Limited (CIL) has strongly defended its position on the allegation of “abuse of dominance” levelled by Maharshtra State Power Generation Company (Mahagenco) and the Association of Power

Kolkata: The ministry of environment and forests (MoEF) once again seems to be putting the brakes on exploration activity for identifying new, mineable coal reserves, which are crucial to the country’s rising coal demand.

AK Debnath, chairman and managing director, Central Mine & Planning Design Institute (CMPDI), told FE that the Planning Commission has set a target of prospecting 15 lakh metres per annum by the end of the 12th Plan Period ending 2017, against the current annual average of 3 lakh metres. Accelerating such activity would require digging more bore holes — at least 15 for every sq km. But the MoEF is sticking to its benchmark of allowing digging an average 1-1.5 bore holes per sq km, which would make the target impossible.

Guj CM had written a series of letters to PM since June 2010 seeking additional coal blocks for Guj Mineral Dev Corp

The Centre has turned down Gujarat government requests for coal blocks. Gujarat Chief Minister Narendra Modi had written a series of letters to Prime Minister Manmohan Singh since June 2010 seeking additional coal blocks for Gujarat Mineral Development Corporation (GMDC) and allocation of an alternate coal block for the state-run company.

Department of Public Enterprise has opposed a coal ministry proposal to provide performance related pay (PRP) from consolidated funds to executives of CIL arms that made losses in the relevant period.

It has said this is not in conformity with norms and would soon send a note to Cabinet in this regard. In the absence of sufficient profit before tax (PBT), loss making CPSEs are not allowed to distribute PRP, the DPE officials said adding there is no concept of providing PRP based on the consolidated account of holding company.

The government is considering allowing power and steel companies to swap their coal linkages among group entities, subsidiaries and special purpose vehicles, in a bid to optimise fuel availability and cut down the restrictive transportation charges.

At present, coal linkages given to companies (mainly in power, steel and cement sectors) are exclusive to a particular project. These linkages are non-transferable even between group companies. “We are examining a proposal on swap/transfer of allocated domestic coal linkages to reduce transportation cost and put domestic coal to best possible use,” said a coal ministry official.

Maharashtra State Power Generation Company (MahaGenco) says it would have to pay an extra Rs 201 crore yearly, due to the 10-15 per cent rise in supply rates from Western Coalfields Ltd (WCL, a Coal India arm.

The rise announced by WCL is for the entire western region. “The rise was made when pricing was shifted to a Gross Calorific Value (basis) from (the earlier) Useful Heat Value basis,” said a WCL official. “Due to the power ministry’s demand, the hike was rolled back.” The roll back had been reversed, he said.

Prices in Eastern Coalfields blocks may go up by 12%; power generation costs set to increase

Seeks Competition Commission of India probe into ?abuse of dominance? by CIL, Western Coal Field

Coal India’s “dominant and monopolistic” position in relation to production and supply has been challenged at the Competition Commission of India (CCI). The Maharashtra State Power Generation Company (Maha-Genco) has complained to the country’s apex competition regulator, pressing for an investigation against the Kolkata-headquartered Maharatna for “abuse of dominant position”.

Coal India has introduced a one-time offer that allows power utilities to lift the fuel directly from mines.

The scheme is available for independent power producers drawing coal under fuel supply agreements (FSAs) as well. “A one-time offer is being made to all power utilities drawing coal under the FSA during 2012-13 to lift the coal, which is held in the stocks on ‘as is where is' basis with the stipulation that the power stations will make their own evacuation arrangement,” CIL has said in a notice. This is the first time Coal India has initiated such a move.