Expressing dismay at the Centre’s failure to work a clause into its contract with the Independent Power Producers (IPPs) to ensure that the benefit of cheaper coal is passed on to consumers, the Parliamentary Standing Committee on Coal has asked the government to direct them to supply cheap power to the people.

“The Committee is dismayed to note that although coal blocks were allocated to private sector power projects without any monetary consideration by the government, with the purpose of making available cheap power to the consumers, no specific condition was included by the Screening Committee in the allocation letter to ensure that the benefit of cheaper coal is passed on to the consumer,” the committee has stated in its report on ‘Review of allotment, development and performance of coal/lignite blocks,’ which was tabled in Parliament on Tuesday.

The committee, headed by Trinamool Congress member Kalyan Banerjee, said the Ministry of Power, in a September 2012 communication, requested the Ministry of Coal to issue orders without further delay, imposing the condition, in the allocation letters to IPPs, that they need to participate in the bids for power procurements called by discoms or their authorised state agency and enter into long-term power purchase agreement as per the bidding guidelines issued under Section 63 of the Electricity Act, 2003, within a stipulated period or face de-allocation of the block, and the issue of incorporating a new condition in the allocation letter retrospectively was reported to be examined in consultation with the Ministry of Law and Justice.

“The Committee fails to understand why this condition was not incorporated [in the allocation letter] at the time of allocation of captive coal blocks offered to IPPs. Since the very purpose of making available the national property free of cost is to ensure that benefits should be passed on to consumers, the Committee feels that there should be no legal consequences even if the condition is incorporated retrospectively,” the report says.

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