PM meets Tata, Ambani over power: 10-point chartsheet

Prime Minister Manmohan Singh called on biggies of India Inc to discuss the acute power shortage threatening to derail the growth of the economy.

The high-profile delegation that met the PM included Reliance Power Chairman Anil Ambani, Tata Group chairman Ratan Tata along with his successor Cyrus Mistry, Hinduja Group Chairman Ashok Hinduja, Sterlite Energy Chairman Anil Agarwal.

Prashant Ruia of the Essar group, GMR's GM Rao, Gautam Adani, Sajjan and Naveen Jindal as well as Lanco Infratech chairman Madhusudan Rao and GVK Group's Sanjay Reddy were also present.

What was discussed at the meeting:

Acute fuel shortages like coal and gas: Many power plants are underutilised because of fuel shortages and several under construction plants are finding it difficult to find affordable coal or natural gas.

Delay in environment and forest clearances, funding problems, worsening health of power distribution companies, government proposal to slap duty on imported power equipment and a nodal point for clearances for power projects was also discussed.

Pricing issues related to imported coal for power projects were also discussed. Ultra Mega Power projects (UMPPs) are facing problems because imported coal prices have risen sharply, making their operations unviable.

These projects are huge and have a capacity of 4,000 megawatts or above.

What is at stake:

Investment worth an estimated 2 lakh crore in power plants already built. Nearly double of this amount is in the pipeline over the next five years.

When the industrialists complained about shortage of coal supplies, the Prime Minister is understood to have asked Coal minister Sriprakash Jaiswal why it was happening and that it should be looked into.

Manmohan Singh promised a time-bound solution to the power sector's coal-supply woes.

He directed Pulok Chatterji, principal secretary at the Prime Minister's Office, to immediately start organising regular meetings of the secretaries of various ministries to sort out the sector's issues.

The committee would chalk out 30-day, 60-day and 90-day plans to resolve the issues.

The power sector leaders would meet with the Prime Minister after a period of 90 days to review the progress.

Secretaries from the Ministries of Power, Petroleum, Coal, Environment and Finance would be a part of the panel.

After the meeting, the ministry of coal said it will increase the minimum supply of coal under the fuel supply agreement (FSA) up to 65-70% as against the demand of 90% by the ministry of power.

There was a stand-off between the ministries of coal and power after the former changed the guidelines for FSAs that promised only 50% supply for new power plants. No new FSA has been signed for almost three years now.

Power stocks traded with big gains: Anil Ambani promoted Reliance Infra soared 8 per cent. Stocks of Tata Power that has plans for several UMPPs jumped over 4 per cent. Lanco Infra advanced 3 per cent.

Power Minister Sushilkumar Shinde, Coal Minister Sriprakash Jaiswal, Deputy Chairman of Planning Commission Montek Singh Ahluwalia and Environment Minister Jayanti Natrajan were present at the meeting.

Earlier in the day, these industrialists had met the Finance Minister Prabab Mukherjee and Oil Minister Jaipal Reddy.