Millennium Post

HC tells Govt to dispose of plea on capping fixed power charge

The proposed ceiling would bar thermal power plants, which have succesfully bid for coal blocks, from increasing tariff on the electricity generated by them. A bench of justices B D Ahmed and Sanjeev Sachdeva asked the Power Ministry to consider the petition of Mandakini Exploration and Mining Ltd, joint venture (JV) of Jindal India Thermal Power Ltd (JITPL) and Monnet Power Company Ltd, as a representation and dispose it of by April 15.

The bench also extended till April 17, the date by which the JV has to submit a bank guarantee of Rs 544.97 crore as well as a payment of about Rs 108 crore under the Coal Mines Development and Production (CMDP) Agreement.

With these directions, the court disposed of the plea of the company in which JITPL holds 73 per cent stake and Monnet the rest. The JV had successfully bid for and was allotted Mandakini coal block in Odisha. In its plea, the company said it had come to know from reports that the government proposed to cap the fixed charge component of rate of electricity generated by companies which successfully bid for the mines earmarked for the power sector.

Such a move, it said, “will amount to ex post facto change in bidding conditions of coal mines for power sector” and would render the entire project “unviable”. The JV company contended that “bidding for a mine was based on the assumption that costs would be factored in the fixed charge”. The company said it had made representations to the ministry on March 24 and 31 with respect to the proposed move but had not received a reply till date.

“Such a change would amount to illegal classification, as the petitioner (JV) would be at a disadvantage against the bidders who would be bidding in auction for upcoming mines,” the petition said.

The JV, in its petition, sought that till a clarification was received from the ministry, any demand under the CMDP Agreement including the bank guarantee and the payment of Rs 108 crore should be kept in abeyance.

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