MUMBAI: The government on Monday said that most issues which were delaying coal-based power projects totalling about 65,000 MW and gas-based projects with a capacity of 24,000 MW have been resolved. The government also said that fresh coal block auctions will be held for projects with a combined capacity of 18-19,000 MW where fuel supply issues have not been addressed.
The issue of projects that were stuck Finance se and stressed bank Hasmukh loans was taken up Adhia during a meeting called by finance secretary Hasmukh Adhia at the Reserve Bank of India HQ here on Tuesday. The meeting was attended by various stake holders in these projects, including chiefs of 13 banks that were lead lenders to various projects, senior bureaucrats from different minis tries, and RBI deputy governor S S Mundhra. Addressing newspersons after the meeting, Adhia said that obstacles facing projects in power, ports and shipyards, roads and steel were taken up during the meeting. According to him, the main hurdles were delay in approvals, land acquisitions, finalisation of the power purchase agreement and inadequate availability of fuel for power projects.
Bank stocks jumped following the assurance that the hurdles have been removed as resolution of some of the large projects would lead to an improvement in the asset quality of banks. ICICI Bank gained 8% to close at Rs 327. Bank of India, Axis Bank, State Bank of India and Bank of Baroda also gained in the region of 2%.
“I am very happy to tell you that the problems facing 65,000 MW of coal-based power projects and 24,000 MW of gas-based projects have been resolved. We still have about 10,000 MW of coal-based power projects which do not have fuel and have already been commissioned and another 8-9000 MW of coal-based projects which is under execution. About 18-19,000 MW of coal-based project still need coal for which the ministry of coal will continue to hold auctions,” said R N Chaubey, secretary, power ministry.
Chaubey said that a parliamentary panel had submitted its report on the new Electricity Act which will be finalized soon. The new legislation would lead to unbundling of electricity services by separating the distribution lines and allowing consumers to buy power from the cheapest seller. This was expected to address the problem of power offtake and power purchase agreements. Mundhra said that the RBI had received suggestions for making available funds under external commercial borrowings for the projects.
