India's Finance Commission likely to reject $12 bln package to help utilities cut pollution -source

Jaiprakash Power Ventures

20/11/2019 01:30

(Repeats story that ran on Tuesday, with no changes to text)
    By Sudarshan Varadhan
    NEW DELHI, Nov 19 (Reuters) - India's Finance Commission has
told the power ministry that its proposal to award utilities 835
billion rupees ($11.6 billion) in incentives to install
equipment to curb emissions is "unviable," a senior official at
the ministry told Reuters on Tuesday.
    The ministry submitted its proposal to the Finance
Commission, which reviews government spending, in February.
    The proposal was intended to help plants comply with new
sulphur dioxide emissions standards originally set by the
environment ministry in 2015.
    The standards mandate installation of pollution cutting
equipment. Some plants must comply by the end of this year,
while others have up to the end of 2022 to do so. 
    More than half of India's coal-fired power plant units
ordered to retrofit equipment to curb air pollution are already
set to miss the deadline, Reuters reported on Friday.
 urn:newsml:reuters.com:*:nL4N27V3XG
    The Finance Commission was likely to reject the power
ministry's spending proposal, according to the ministry
official, who is not authorised to speak to media and so did not
wish to be identified. 
    A spokeswoman for the Commission said the government body
has not finalised its recommendations, but declined to comment
further. If the Finance Commission rejects the proposal, the
plans are unlikely to be approved by the government.
    A power ministry spokesman declined to comment.
    Emissions from power plants are one of the biggest causes of
the chronic smog now seen in New Delhi and some other Indian
cities.  
    The Association of Power Producers (APP), a lobby group for
private utilities in India, estimates it will cost private
companies roughly $38 billion to retfrofit their plants to cut
emissions.
    It contends that debt-laden power producers, which are still
owed over $11 billion in dues by government-owned distribution
companies, cannot afford to invest such vast sums at this time.
    India has identified 34 economically stressed power plants
with a combined capacity of 40 gigawatt (GW). They are owned by
companies including Adani Power  ADAN.NS , Essar Power, the GMR
group  GMRI.NS , the Lanco Group and Jaiprakash Power Ventures
Ltd  JAPR.NS .
    The Ministry of Power wants to extend deadlines for some
economically stressed power plants that have been ordered to
retrofit equipment to curb air pollution, the official and two
other power ministry officials familiar with the matter said.
    Among the 34 plants, the debt of 28 plants are in various
stages of resolution and some of those plants may be able to
meet the emission deadlines, one of the officials said. The
ministry wants to grant an extension for the other six plants,
the official said, but did not name the plants.
    The Supreme Court, which is hearing a petition on air
pollution, will make the final call on the issue.
    "We will finalise a list of plants which need extension and
then submit to the Supreme Court, which will take a call," the
official said.
    
($1 = 71.8400 Indian rupees)

 (Reporting by Sudarshan Varadhan; Additional reporting by Aftab
Ahmed; Editing by Susan Fenton)
 ((Sudarshan.Varadhan@thomsonreuters.com; +919810393152;
Twitter: https://twitter.com/sudvaradhan @sudvaradhan;))