Indian utilities seek faster coal-mine environmental approvals

Indian utility executives, including Reliance Power Ltd Chairman Anil Ambani, plan to ask the government for faster environmental approvals for coal mines to help increase electricity generation and ease costs.

The companies led by India’s richest families also want natural gas supplies and a waiver of import duty on thermal coal at a meeting scheduled with officials of the Prime Minister’s Office today, Ashok Khurana, director general of the Association of Power Producers, said by telephone. The delegation includes Cyrus Mistry, deputy chairman of Tata Sons Ltd, Gautam Adani, chairman of Adani Power Ltd, and Naveen Jindal, chairman of Jindal Steel & Power Ltd, Khurana said.

The government last week ordered state-run Coal India Ltd to import the fuel if needed to increase supplies to power companies after the industrialists urged Prime Minister Manmohan Singh to help ease shortages. Singh set up a panel headed by Pulok Chatterjee, the principal secretary at his office, to find solutions to problems faced by utilities, including the higher costs of importing coal.

“A step in the right direction has been taken and the government now needs to build better coordination within its departments to fix these issues,” said Deven Choksey, managing director at Mumbai-based brokerage KR Choksey Shares & Securities Pvt. “In a matter of a few weeks, my confidence in the power sector has increased.”

The power companies are seeking allocation of 25 million cubic metres a day of gas needed to run plants with a generation capacity of 6,500 megawatts, Khurana said. They also want banks loans to power projects to be increased and permission to sell tax-free bonds, he said.

“It’s a follow-up meeting to reiterate the critical issues of fuel supplies and environment and forest clearances as well as our wish list for the budget,” Khurana said. “We are also going to discuss pricing of imported coal.”

Reliance Power, Adani Power and Jindal’s JSW Energy Ltd are among companies that mothballed plans to invest $36 billion to build 42 gigawatts of capacity, Association of Power Producers’ data show. The shelved capacity is equal to 68 per cent of the government’s target for the five-year period that ends in March.

Coal India, the world’s largest producer of the commodity, cut its output target for the year ending March 31 by 2.6 per cent to 440 million metric tonnes after heavy rains halted work at mines and new projects were held up by delays in land acquisitions and environment approvals. The company plans to increase production by 5.6 per cent next year to 464 million tonnes, according to coal secretary Alok Perti.

The federal budget is scheduled to be presented in India’s parliament on March 16.