Bankers have formed a committee under IIFCL Chairman Santosh Nayyar to suggest ways to sort out financing issues in the power projects which are held up on account of fuel supply constraints.
The committee will submit its report on November 7. "We have discussed about gas based, coal based power projects and projects which are held up because of last mile financing...we have constituted a small group headed by the CMD, IIFCL, Santosh Nayyar to examine all these issues," Financial Services Secretary G S Sandhu told reporters after a meeting between bankers and private sector power producers.
As much as Rs 5 lakh crore investment is stuck in power projects on various reasons including raw material shortage. During the meeting, power producers made a detailed presentation to highlight the issues concerning the sector.
Sandhu also said the Coal Ministry will auction the coal blocks that have been cancelled recently by the Supreme Court within three months.
"The second area which I have mentioned is on the coal blocks which have been cancelled. They (coal blocks) have to be put to auction within three months time frame. That is what they (Coal Ministry) have informed us, three months that it will go to auction," Sandhu said.
He also said that certain issues will be discussed with the Reserve Bank as there are constraints that the banks are facing such as viability, extra funding and debtrestructuring.
Sandhu said some issues will also be taken up to the Cabinet.
"There are issues going to the Cabinet very very soon such as pooling of the imported coal with domestic coal as well as gas pooling," he added.
He also said certain matters will be taken up to the Finance Ministry at a later stage.
"Once the report is available to us, then we will go to the Finance Minister as well and take his approval on implementation of those issues. And wherever we feel that the other institution or the other ministry is not responding, that will also be taken up at the higher level."
Sandhu said issues related to restructuring, life cycle linked financing were also discussed during the meeting. As much as 1,00,000 MW of coal and gas based power projects are suffering due to raw material shortage and have been facing time and cost overruns.
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