First tender for coal utilisation scheme fails with zero bids

The Centre’s programme of ensuring coal for stressed power units has failed to generate much interest on the part of power developers.

Not a single bid was put in in the first tender called by Gujarat to provide the cheap coal earmarked for the state. 

Private developers who buy this coal have to sell power at Rs 2.82 per unit or less. They will get coal after they bid for a discount on the notified rate.

The reverse auction was held on Monday for procuring 1,000 Mw.

The aim is to reduce the cost of fuel for ailing distribution companies and effectively distribute domestic coal.

Officials in Gujarat Urja Vikas Nigam (GUVNL), when contacted, said they had extended the deadline for submitting bids by 20 days. However, they denied there had been any change in the tariff rates.

Power developers said the cap was not viable. 

“The cap is inclusive of transmission cost with coal supply, quantity, and price risk, and not viable,” said A K Khurana, director general, Association of Power Producers. 

In May last year, the Cabinet had approved the proposal for allowing flexibility in utilising domestic coal among power-generating stations. 

Under the new policy, the coal requirements of a state will be clubbed and assigned to the respective state/state-nominated agencies. 

The state will award coal linkage in accordance with the need, efficiency, and the cost of power to power plants in its jurisdiction.

The policy also allowed for coal swaps between inefficient and efficient plants and from plants situated away from coal mines to the pit head to minimise the cost of coal transportation, leading to reduction in the cost of power.

For the centrally owned power plants, coal linkages of central generating stations (CGS) will be clubbed and assigned to the company owning the CGS.

In the case of state/central generating plants, the deciding criteria will be plant efficiency, coal transportation cost, transmission charges, and the cost of power.

Privately owned independent power plants (IPPs) have to bid for coal linkages. The basis of bidding would be the source of coal, quantity, the amount of power generated, and the delivery point for the receipt of power. which they would have to indicate.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel