Ambani Leads Tycoons Pushing India for Faster Coal Approvals
Indian utility executives, including Reliance Power Ltd. (RPWR) Chairman Anil Ambani, asked the government for faster environmental approvals for coal mines to help increase electricity generation and ease costs.
The companies led by India’s richest families told officials of the Prime Minister’s Office they want natural gas supplies and a waiver of import duty on thermal coal, Ashok Khurana, director general of the Association of Power Producers, said after a meeting in New Delhi today. The delegation included Cyrus Mistry, deputy chairman of Tata Sons Ltd., Gautam Adani, chairman of Adani Power Ltd. (ADANI), and Naveen Jindal, chairman of Jindal Steel & Power Ltd. (JSP)
The government last week ordered state-run Coal India Ltd. (COAL) to import the fuel if needed to increase supplies to power companies after the industrialists urged Prime Minister Manmohan Singh to help ease shortages. Singh set up a panel headed by Pulok Chatterjee, the principal secretary at his office, to find solutions to problems faced by utilities, including the higher costs of importing coal.
“A step in the right direction has been taken and the government now needs to build better coordination within its departments to fix these issues,” said Deven Choksey, managing director at Mumbai-based brokerage K.R. Choksey Shares & Securities Pvt. “In a matter of a few weeks, my confidence in the power sector has increased.”
Reliance Power fell 4.5 percent, the most since Nov. 17, to 122.65 rupees at close in Mumbai. Tata Power dropped 4 percent, while Adani Power declined 9.9 percent, the most since July 29. Coal India fell 1.2 percent to 322.15 rupees. The benchmark Sensitive Index ended 1.5 percent lower.
“Fast-tracking of clearances for coal mines is the only way,” Coal Secretary Alok Perti told reporters in New Delhi after the meeting. “We have enough coal reserves to meet demand.”
The utilities sought a rationalization of electricity tariffs to reflect rising fuel costs, Perti said.
The power companies are seeking allocation of 25 million cubic meters a day of gas needed to run plants with a generation capacity of 6,500 megawatts, Khurana said. They also want banks loans to power projects to be increased and permission to sell tax-free bonds, he said.
“It’s a follow-up meeting to reiterate the critical issues of fuel supplies and environment and forest clearances as well as our wish list for the budget,” Khurana said. The pricing of imported coal and the potential of hydropower were also discussed, he said.
Reliance Power, Adani Power and JSW Energy Ltd. (JSW) are among companies that stalled plans to invest $36 billion to build 42 gigawatts of capacity, data from the Association of Power Producers’ show. The shelved capacity is equal to 68 percent of the government’s target for the five-year period that ends in March.
Coal India, the world’s largest producer of the commodity, cut its output target for the year ending March 31 by 2.6 percent to 440 million metric tons after heavy rains halted work at mines and new projects were held up by delays in land acquisitions and environment approvals. The company plans to increase production by 5.6 percent next year to 464 million tons, according to Coal Secretary Perti.
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