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Existing Power Agreements To Be Revised

India CSR by India CSR
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Anil-SwarupIndiaCSR News Network

NEW DELHI: The government is re-examining bids for eight coal blocks, with Coal Secretary Anil Swarup terming the bids as ‘outliers’.The auction process for these eight blocks was over quickly and the winning bids were much lower than those in the first round of auctions.

“On the face of it we felt that the bids that were offered were not at the same levels as similar blocks in the same group” Swarup said in an interview .He however declined to say if the government suspected cartelization, adding that it was too early to say if the bids for these 8 blocks would be cancelled.

“There is a pattern and if somebody falls outside that pattern that needs an examination. Whether it is a cartelisation or not is not something which I can say as of now” he said. The government’s move has come as a surprise to observers as well as participants.

In the first round of auctions when companies had bid aggressively, Swarup himself had gone on record to say that the government would not interfere even if it felt the bids were aggressive. Swarup reiterated that the power companies will not be allowed to pass on the coal block cost to consumers through higher tarrifs.

In fact, companies which have rebid for the coal blocks will have to lower the tarrifs quoted in the earlier power purchase agreements (PPAs). “Right from day one I have being saying that existing PPAs will be re-opened and tariff adjusted downwards in the case of reverse bidding” Swarup said.

“The idea of having reverse bid was basically to impact the tariffs in the negative sense in the sense of reducing the tariffs and that is what government is very clear about,” Swarup said. He said the government would be allotting 43 mines to public sector entities by this weekend. States are likely to reap Rs 2.07 lakh crore from the coal block auctions, Swarup said. On Coal India, he said the PSU behemoth was likely to produce around 500 million tonnes this fiscal, up 8 percent over last year.

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