Industry body Assocham today suggested the government should have a uniform coal price for captive and independent power plants in the country.
The coal linkage price should be the same for captive and independent power plants as the coal ministry is set to review the New Coal Distribution Policy announced in October 2007, it said in a statement.
Coal India (CIL) recently increased the coal price by 40% for captive power plants. Many steel and ferro alloy plants have set up captive plants for stable operations and to reduce costs, as it is not feasible to buy power at grid rates.
"As such, captive power plants must also be included under the definition of power sector consumers and the same linkage price must be applicable for captive power plants and independent power plants," said DS Rawat, Secretary General of Assocham.
The Coal Ministry has also given linkage price for companies, which have been allotted coal blocks. For example, Patrapada coal block has been allotted under option 3 in which associate companies have no role to play in the development of the coal block.
Hence associate companies should not be penalised for the delay in development of coal block and must get 100% of linkage quantity, Rawat said in communications to coal minister Sriprakash Jaiswal, steel secretary PK Mishra and Member (energy) at the Planning Commission BK Chaturvedi.
Since associate companies have no role to play in the development of a coal block, the 40% increase in prices should not be applicable to them, he added.
Against the CIL’s policy of giving full linkage of 75% of coal requirement of iron and captive power plants, Mahanadi Coalfields is giving only half of 75% of the requirement – that is 37.5% of the total requirement. But plants in Chattisgarh are getting 75% from South Eastern Coalfields.
Mahanadi Coalfields has also reduced the supplies through linkage and is selling beyond 10% through e-auction. This needs to be corrected, he said, adding the company’s quality of coal was inferior to Rajgarh and Korba coal, and thus price correction needed to be re-set accordingly.
"Sponge iron plants and captive power plants are facing severe difficulty as a result of these," he said while urging for immediate government intervention.
