Current form of coal block auctions is creating discrimination within the power sector

 Current form of coal block auctions is creating discrimination within the power sector, i.e. IPP having PPA with state utilities, IPP without PPA and CPP. While reverse auction for IPP with PPA will decrease coal cost, forward auction process increases coal cost for CPP and others. Hence, it may not be in the best interest of competitive development of power sector. To justify forward auction, it is argued that the natural resources can’t be cornered cheap by industry but than why to allow cornering of blocks even by IPP and allow them to sell up to 50 per cent extra coal. The only solution is to follow only reverse-auction process for all sectors to bring-down energy cost and equitable distribution of coal. We submitted detailed process-design to the Coal Ministry for allowing only 50-60 per cent of each block for captive consumption that works with the provisions of ordinance. The bidder has to quote minimum price for balance 40-50 per cent coal for transfer to the nation thus creating lowering benchmarks.
Rajiv Agrawal, Secretary, Indian Captive Power Producers Association