The recent Supreme Court order declaring all coal block allocations since 1993 illegal may have badly hit private power generation companies but engineers engaged in power utilities under central and state governments are not complaining.
According to the All India Power Engineers Federation, which represents engineers working in the government power sector, the Power Purchase Agreements signed with private power companies on the basis of the coal blocks whose allocation have been declared illegal should either be cancelled or reviewed in order to revise the power tariffs in favor of consumers.
Chairman of AIPEF Shailendra Dubey said that following the Supreme Court order it had become even more necessary to review the previous government’s energy policy. The UPA government’s energy policy was flawed and led to several scams and unprecedented power crisis in the country, he said. Dubey called for setting up a committee under the Prime Minister with power sector experts and AIPEF representatives as members to review the energy policy of the previous government.
Seeking audit of all power companies in the country including private power companies by the Comptroller and Auditor General, Dubey said it was important to find out the generation and distribution costs of private power companies as compared to those of government power companies. He claimed private power companies were not running their power plants at full capacity to force upward revision of tariffs.
AIPEF plans to hold a demonstration outside the Parliament during the winter session if the previous government’s policy of over dependence on the private power sector is not reviewed.
The Supreme Court order declaring all coal block allocations since 1993 illegal has no doubt provided a major boost to AIPEF which is vehemently opposed to entry of private players. The representative body of government power sector engineers will now apply more pressure on the Centre as well as states to limit the role of private sector in power generation and distribution.
The Supreme Court order said the entire allocation of coal blocks by the screening committee from July 14th, 1993, suffered from arbitrariness and legal flaws. The Ministry of Coal had ordered setting up of the screening committee in July 1992 to consider proposals from private power companies for captive mining on first-cum-first-serve basis. The guidelines of the screening committee gave preference to large power and steel projects. Between 1993 and 2010, the government allocated a total of 218 coal blocks of which 24 were taken away at different points in time reducing the number of allocated blocks to 194.
The Supreme Court will hold a further hearing on the matter on September 1st during which the fate of the coal blocks whose allocation have been declared illegal is likely to be decided. Very few of the companies who were allocated these coal blocks have actually signed mining leases and begun production.