The Pulok Chatterjee-led committee of secretaries (CoS) has begun work on resolving issues threatening growth of the Indian power sector by convening meetings of two empowered groups of ministers (EGoMs) — one on gas allocation and another on ultra mega power projects (UMPPs).
The fuel-related issues being considered by the two EGoMs is critical for future growth of power sector where investment of over $200 billion is proposed during the Twelfth Five year Plan (2012-17). The committee has also proposed a meeting of the inter-ministerial panel to resolve issues relating to short supply of domestic coal to power projects.
Sources said the committee has identified five key areas — gas linkage, Coal India Limited's fuel supply agreement, diversion of surplus coal from captive mines, forest clearance for allocated captive coal mines located in dense forests and Indonesian coal pricing issues relating to the Mundra and Krishnapatnam UMPPs — for the government intervention. These would be taken up on priority basis as the committee has been given the mandate to resolve all issues in three months.
“We have a lot of expectation from the committee. The Prime Minister has promised to reolve all power sector issues in a time bound manner,” Association of Power Producer's director-general Ashok Khurana said.
The constitution of the commitee is being seen as an intevention by the Prime Minister’s Office (PMO) to ensure that inter-ministerial wranglings did not impede growth of critical infrastructure. Though government agencies and ministries have been aware of the problems, decisions have been pending for a long time. This has severely affected the power sector which is expected to end the 11th Plan with a capacity addition of mere 42,000-45,000 MW against the original target of 78,700 MW.
Few days in to its constitution, the Chatterjee-led commitee has called for a meeting of the EGoMs on gas allocation on February 14, while a similar committee is also expected to meet shortly to look into the Indonesian coal pricing issues affecting Mundra and Krishnapatnam UMPPs which are caught in a contractual bind.
The EGoM on gas allocation has been asked to ensure gas linkage to power projects worth 8,000 MW capacity expected to be commissioned by March end. The ministerial panel has not met for the last two years.
Similarly, the EGoM on coal has been requested to ensure that Coal India signs fuel supply agreements (FSAs) with all power projects that may be commissioned in the current 11th Five-year plan. Besides, it has also been asked to ensure that under the FSAs, CIL commits to supply enough coal to help these projects run at 85% capacity. That entails annual coal requirement of 425 million tonne.
The ministerial panel has also been asked to ensure speedy forest clearance to eight captive coal blocks including Chatrasal, Mahan located in dense forest areas.
The CoS has also asked the coal ministry to prepare a policy to facilitate diversion of surplus coal captive coal blocks through consultations with the concerned ministries.
The EGoM on UMPPs has been asked to examine Indonesian coal pricing issues relating to the Mundra and Krishnapatnam projects which have been caught in a contractual bind as the existing power supply contracts do not allow tariff revision due to increase in fuel costs.
The CoS was set up after top bosses of private power companies, including Ratan Tata and Anil Ambani, met Prime Minister Manmohan Singh on January 18 to seek his intervention for early resolution of power sector issues.
Top officials from the ministries of power, finance, coal and petroleum are members of the CoS, which is headed by Pulok Chatterjee, principal secretary to the PM.
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