Assocham seeks PM intervention in coal supply to power cos

The chamber asked for multi-front government action to improve the financial viability of power utilities as several thousands megawatt (30,000 MW) of capacity generation lying idle in central, private and state sectors.

Almost entire country is suffering from prolonged power shortage and industries are forced to declare holidays due to non-availability of power, it said in a statement.

"With the RBI move to block further finances to the power sector which has over Rs 1.19 lakh crore liabilities to the banks, and the state-owned power utilities accumulating losses after losses, it is feared that the power sector is headed for severe crisis," it said.

Assocham said as much as 6,000 MW of existing capacity of NTPC was idle and another 26,000 MW capacity barely working due to non-availability of coal.

"In addition, both states and private sectors are holding on to power projects due to revenue losses and lack of coal or gas fuel," it said adding in the national capital alone, a fully operational 750 MW plant is idle due to unavailability of gas fuel.

Fate of another 14,715 MW of capacity is hanging in the balance, it said.

The chamber called for reconsideration of Coal India Ltd's (CIL) monopoly in coal mining, removing all hurdles to private sector power generation, privatising power distribution and bold steps towards tariff rationalisation.

"...the present situation was extremely worrying. While the Power Ministry claims the highest annual addition to capacity at 19,459 MW, more than what was achieved in the five years of the 10th Plan, the entire country was groaning under power cuts," it said.

The industry body said due to power crisis, industrial production is rapidly decelerating and input costs are rising.

"The cumulative effects are already visible and would further depress GDP growth when the results of this quarter are made available," it said adding bureaucratic hurdles were dissuading private sector from pushing ahead with larger role in the sector.

Assocham said that it was tragic that the Power, Environment and Coal Ministry were sharply divided over the terms of assured coal supply and working of more mines.

India has to import 70 million tonnes of coal at an exorbitant price while sitting on 100 billion tonnes of coal reserves, it said.

"Major problem was with the mining monopoly for the public sector CIL which is not prepared to guarantee supplies nor curb illegal mining...the Environment Ministry is further complicating it by sticking to its rules and delaying final clearances for projects, it added.