Coal prices to be regulated

The Government of India has agreed to put in place a mechanism to regulate coal pricing which has a huge bearing on the cost of generation of power.

Following a detailed letter addressed by chief minister Y S Rajasekhara Reddy to Prime Minister Manmohan Singh and the subsequent meetings attended by state power officials in New Delhi, the Centre has decided to refer the coal pricing issue to the Tariff Commission at the national level which would harmonise the interests of consumers and producers and arrive at a proper pricing structure, a press release issued by the chief public relations officer, chief minister's office, said.

Reddy took up the issue with the Centre in the light of the Coal India Limited's decision to increase coal prices by around 15 per cent with effect from June 2004, which has resulted in an additional burden of Rs 128 crore per year on AP Transmission Corporation (APTransco) in terms of power purchase cost.

The chief minister, who is going to attend the NDC and inter-state council meeting at Delhi on June 27-28, would also urge the Prime Minister to ensure that the Centre initiates steps to make available the gas as agreed to in the gas supply agreements by GAIL for all the four sanctioned projects in Andhra "� expansion of GVK, Konaseema, Vemagiri and Gouthami "� which together have a total installed capacity of 1,500 mw.

Any failure on this count would mean that the Andhra government will have to shell out almost Rs 1,000 crore a year towards fixed charges, without a single unit of power being generated and supplied, to the four developers, the press release added.