SHAKTI Scheme: Most power units barred from bidding for coal

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New Delhi | Published: March 12, 2019 5:44:39 AM

coal, coal sector, coal industry, ncltThe government came out with the Scheme for Harnessing and Allocating Koyala Transparently in India (SHAKTI) to address the key challenge of coal linkage for around 40,000 MW stressed assets getting resolved under the NCLT.

The second round of coal auction under the Shakti-B scheme may see far fewer bidders than the first one held in 2017 because of an exclusion criterion. Analysts see power utilities with combined capacity of 407 MW could place their bids for coal in the forthcoming Shakti-B second round, which is just 5% of 8,440 MW capacity that vied for fuel in 2017.

KSK Mahanadi’s (Akaltara plant), Adani Power’s Tiroda and Kawai plants, GVK’s Goindwal plant and GMR’s Kamalanga unit, Bajaj Power, Adhunik Power, ACB and Inland Power had participated in the first round. All these players will not be eligible to participate in the second round to secure the balance fuel requirement.

Industry sources said the bidders participated in the auction thinking that it will only be a one-time process wherein the maximum allocable quantity would be restricted to 80% of maximum eligible quantity of all eligible bidders.

“If the maximum allocable quantum under second round of B (ii) auction was made available in the first round itself, the maximum allocable quantum i.e. in tonne would have increased, thereby the earlier bidders would have had opportunity in first round itself to avail more quantum against their requirement,” the Association of Power Producers said in a letter to coal minister Piyush Goyal in February.

“If the second window is now being contemplated to allow participants who have resolved issues related to non-submission of Discom certificates due to litigated/revision in PPAs, prevailing coal block litigations… then not allowing earlier bidders to avail their balance shortfall quantities will be a loss of opportunity for them.” “Further, to avoid any litigation issues arising out of loss of opportunity to earlier bidders, it would be prudent to allow their participation in subsequent rounds of B (ii) auction,” the letter said.

Ashok Khurana, director general of the Association of Power Producers, told FE although the companies are not looking at any legal action as of now, they would request the government to come out with a procurement policy that is not based on shortage of coal. “Unless there is certainty of coal supply, certainty of prices and quality, the bid becomes speculative, so that bidders either make windfall profits or a complete loss. Our request to the government is to create a sustainable model of coal procurement that is not speculative in nature,” Khurana said.

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The government came out with the Scheme for Harnessing and Allocating Koyala Transparently in India (SHAKTI) to address the key challenge of coal linkage for around 40,000 MW stressed assets getting resolved under the NCLT.

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