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Power Companies with Cheaper Power May Have Advantage in Coal Allotment Process by CIL

News

Supply cheap power and the government will allot coal. This seems to be the philosophy at the coal ministry. 

Source: ET

SNP Insight

This may provide benefit to the consumers and distribution companies. But it may put some generating unit on stress. The generating units with high debt and rising amount of interest will find it tough to lower their tariff when they are already on financial stress. So unavailability of coal will lower down there operating efficiency and hinder the revenue generation process for survival. This process may hold good for upcoming projects but government should look into all the complication before taking any concrete step.

Source: SNP Infra Research