Mumbai: Rating agency Crisil said the recent coal block auctions might have addressed some fuel supply issues, but private power producers with nearly 10,000 MW capacity may have to face under-recovery to the extend of 65 paise per unit because of aggressive bidding.
It said in a statement, “Private power producers with a capacity of 10,000 MW, who bid the highest at the recently concluded coal block auctions, are staring at 65 paise per unit under-recovery in variable cost because of aggressive bidding.” These players could clock under-recovery of Rs 1,350 crore in FY16 because variable tariffs will not cover mining costs and production-linked payments to Government, it said.
It estimated the deficit could rise to over Rs 4,500 crore once allotted coal blocks reach peak production. “The aggressive bids indicate the big premium on fuel security. Bid winners have agreed to forego, on average, mining costs of Rs 650 per tonne and pay an additional premium of Rs 400 per tonne to States in FY16,” its Senior Director Prasad Koparkar said.
