Chhattisgarh's Gare Palma 2&3 coal block, previously owned by Jindal Power (JPL), has attracted huge attention from...
Chhattisgarh’s Gare Palma 2&3 coal block, previously owned by Jindal Power (JPL), has attracted huge attention from bidders with at least 10 companies having entered the fray already.
In case of fierce bidding, the Navin Jindal-owned JPL could end up relinquishing the cost benefit that the company enjoys due to existing operational infrastructure in case of Gare Palma 2&3 block that feeds its 1,000-MW plant at Raigarh. This could hamper the company’s ability to bid aggressively for the block that has been set aside for reverse bidding for the power sector.
Sources in the coal ministry told FE that the coal block with a production capacity of 6.25 mtpa has attracted bids from Adani Power, DB Power, GMR, Hindalco, KSK Power, Lanco, Ratan India, Rosa Power, Sesa Sterlite and Simhapur Power.
In December, ICICI Securities, in a report, had said that JPL had the ability to bid aggressively in the auction due to its lower fixed cost. “The possibility of reverse auction for power end use coal blocks is a significant positive for incumbents like JSPL as it helps them bid aggressively as the fixed costs are low. Also, being an incumbent, JSPL is naturally placed as a favoured party on technical competence.”
JPL has medium-term power-purchase agreement (PPA) with Tamil Nadu state distribution company for 200 MW. Balance power is sold through a mix of medium-term and short-term PPAs, power exchanges, state-owned utilities and power distribution and trading companies.