FICCI wants more coal for power sector

FICCI has called for a higher priority in allocation of coal to the power sector.

It has recommended that notifications inviting bids need to be issued separately for each sector, and accordingly, 90% of non-coking coal resources may be offered to power generation end-users.

This is in response to the Draft bidding guidelines for allocation of coal blocks, prepared by the Ministry of Coal in consultation with the Central Mine Planning and Design Institute.

On whether this would impact the cement and steel sectors, the Federation of Indian Chambers of Commerce and Industry asserted that since power sector mostly relies on non-coking coal, coking coal blocks will automatically be reserved for the steel sector. As regards the cement sector, it is a well appreciated fact that while India is a net exporter of cement, acute power shortage is a common scenario. Thus, greater emphasis on the power sector is much needed.

That apart, FICCI has also suggested that prior identification of end-use project should not be a pre-requisite for bidding. Given the present fuel scenario, fuel availability is the single biggest development challenge facing thermal power projects in the country. Thus, securing fuel, rather than existence of operating or under construction project, be a precondition for bidding.

Also, the federation has recommended removal of a clause that restricts award of a block to a single bidder. Such a restriction, says FICCI, could lead to a scenario wherein relatively weaker bidders may be awarded coal blocks, thereby creating an uncertainty over development of the resource.