Bharat Rakshak

Does anyone have an update on the UMPPs ?

Rachita Prasad, ET Bureau Aug 25, 2011, 03.55am IST

MUMBAI: It has all come down to a rupee. But the one rupee increase in the cost of generation could set Tata Power back by Rs 1,800 crore when it switches on the first 800 mw unit of its 4,000 mw ultra-mega power project in Mundra next month. Tata Power is contracted to sell power from this project to five states at an average price of Rs 2.26 per unit. But imported coal prices have risen in the aftermath of Indonesia's decision to link prices to international benchmarks. The setback would make a mockery of the 14% return on equity norms provided by the Central Electricity Regulatory Commission for such projects.

So, the Tatas are renegotiating. But ADAG's Reliance Power has halted work on its 4,000 mw Krishnapatnam ultra-mega power project (UMPP) in Andhra Pradesh on similar concerns. "The issue is that we don't have sufficient coal today and we won't have it tomorrow," says Reliance Power's CEO JP Chalasani. "So we will have to supplement it with imported coal. Krishnapatnam is not the only project that has been impacted, it is a sector issue."

Both Tata Power and Reliance Power had bought coal mines in Indonesia to fuel their power plants. But the local government changed its policy, making cheap export of coal impossible. Under new norms, coal exported out of Indonesia would be up to 150% more expensive, thus making the project economics go awry.

But can private power producers ask for contracted rates to be renegotiated due to fuel price rise? The power ministry doesn't think so.

That's just one issue that has stymied UMPPs, but it is not the only one.

A third such project is yet to tie up funds even as interest rates continue to rise. Another has concluded initial bids but only after a delay of 18 months due to issues relating to environment clearance. Bids have been invited for yet another but it is yet to get the nod from the environment ministry.

About Rs 100,000 crore of investments are riding on just these five projects put together. But more than that, India's power security hinges on these UMPPs - a total of 16 such are planned in the 12th Five-Year Plan. Together, they were to add 64,000 mw, an increase of 40% from the nation's power generation capacity. They are desperately needed to achieve the target of 100,000 mw capacity addition in the 12th Five-Year Plan (which starts next year). Together, they could light up around 53 million households. They could have helped overcome a peak power deficit of almost 9%. They could also have shown how the private sector could catalyse infrastructure development. But none of this seems likely now.

Can contracted rates be renegotiated?

Private UMPP developers would want that, but the union power ministry won't oblige. The state electricity boards can't oblige given their poor finances. And making consumers pay higher tariffs is never easy.

"The power purchase agreement is between the buyer and the seller," Power Secretary P Uma Shankar told ET. "They need to discuss it to understand the issue and what can be done to resolve it." The buyers, in this case, happen to be 10 state electricity boards, most of which are starved for cash.

In the case of Tata Power, the contract provides for cost escalation for 45% of fuel cost, but the Reliance Power agreement is structured without any escalation clauses. Fuel accounts for almost 70% of the generation cost for a company. At the time of bidding, developers may quote lower charges for escalation in fuel prices to make their bids more competitive. But they have to bear the risk.

"The government cannot intervene in a contract between these companies and the procurers," a senior power ministry official said on condition of anonymity. "The competitive bids were based on companies' own assessment of risks and the burden of price risk has to be borne by the developer. Changes, if any, must be done in consultation with the buyers." But that would be a long drawn out process, because there are many contracts to be renegotiated with many electricity boards.

Tata Power is in pact with the electricity boards of Gujarat, Maharashtra, Punjab, Haryana and Rajasthan. Reliance Power is contracted to sell electricity at 2.33 a unit to Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra.

Ultimately, the country would lose if there are such delays. The industry lobby may be using that as leverage to make the best out of a bad situation.

"It (renegotiation) may violate the pure logic of a bid but the government needs to have a sympathetic approach as it is inconceivable for the private sector to make predictions for the next 25 years," says Vinayak Chatterjee, chairman of infrastructure consultancy firm Feedback Ventures. "These are assets where private and public money and interest is at stake. States should consider the reasonable solution looking at the larger picture."

"It is more than four years since the UMPP policy was framed. It is necessary to take stock and allow extensive feedback," says former power secretary RV Shahi, who spearheaded the policy when he was the power secretary from 2002-2007. He is now the chairman of consulting firm Energy Infratech. "If certain provisions (in the upcoming UMPPs) need to be changed, elaborated or added, it should be considered," he adds.

Under the UMPP policy, the government identifies a project and sets up a shell company that secures land and other clearances. The shell company is then transferred to the developer who is willing to develop the project for the lowest tariff.

Expect long-winding renegotiations in the old projects. But there is a rethink on UMPPs that will come up for bidding soon.

Light ahead in the tunnel

Power ministry sources say they are considering some changes in the bid conditions based on the problems faced by projects in the past. But these are only for upcoming UMPPs. They rule out any changes in existing contracts.

"We are looking at making some changes in the concession agreements for new projects, but it is too early to say what would be changed," Power Secretary Uma Shankar says. Only four of the 16 such projects have been awarded so far. The rest have run into delays relating to environment clearances, land acquisition and fuel linkages. The delays may now actually go in favour of UMPPs.

Despite setbacks to the first six, the fresh UMPPs that will come up for bidding will attract the private sector's interest, industry sources say. "UMPPs would continue to generate more interest than any other project," says Raaj Kumar, chief executive officer, GMR Energy. "It offers scale, and also other pre-requirements such as land, fuel linkage (in case of pit-head based projects) and clearances. To that extent fund-raising is easier."

Developers are keen that the remaining UMPPs are rolled out without further delays. But financing will pose a challenge.

"Clearly, we all are interested," says Lanco Infratech's Chief Financial Officer J Suresh Kumar. "But it will not be possible for every developer to finance these projects easily in an environment where interest rates are hardening."

Banks have hiked key rates by 200-250 basis points in the past one year following Reserve Bank of India's monetary tightening measures.

What will the price of Coal be doing in the future? Free report. MoneyMorning.com/Coal_Investors"Banks have become more circumspect and cautious, and are being selective," said S Vishvanathan, managing director & CEO of SBI Capital Markets. "Good projects are still being closed financially. But availability of cash with banks is not as plenty as before," he adds. The company managed fund-raising for two of the four UMPPs - Tata Power's Mundra project and Reliance Power's Sasan UMPP. Vishvanathan recalls that banks were earlier aggressive about financing infrastructure projects under the PPP route. Not any more.

Private investment in infrastructure from debt and equity sources has slowed and, consequently, power sector investment may now fall short of targets, Fitch Ratings said in a recent report.

But experts say these hurdles may be a blessing in disguise and can bring in a more realistic approach towards UMPPs. They believe the bids for the next round of these projects may not be as aggressive as developers learn to assess and manage the risk-return trade-offs better.

The last UMPP that was put up for bidding - the pit-head project at Tilaiya - met with a tepid response when financial bids were invited in January 2009. But now, there is renewed interest for the upcoming UMPPs at Orissa and Chhattisgarh, particularly among utilities which missed out on the opportunity for large-scale capacity addition earlier. "But the aggression we saw (in the bids) earlier may not be there anymore," says ICP Keshari, joint secretary in the ministry of power.

"Bankers will advise realistic bids. They will be the balancing factor," says Debashish Mishra, senior director, consulting, Deloitte Touche Tohmatsu India. "Most bids are likely to come clustered around the same level." He does not rule out a freak high bid by a company which may have lost out earlier.

A new report from the World Wind Energy Association tracks new wind power installations in the first half of 2011, with China, the United States and India leading the pack. Though new installations were lower in Germany and Spain, strong commitment to renewable energy in previous years means both remain in the world's top five nations for wind power.
Here's how new wind power installations were divided:
In total for the first half of 2011 all nations added an additional 18.4 GW of new wind power, with the year expected to end with there being 43.9 GW completed. The world's total installed wind power capacity by mid-year was 215 GW. As a point of comparison, by the end of 2010 there was 196.68 GW of wind power; by the end of 2009 there was 159.77 GW. China leads the world in additional wind power, installing 8 GW through June 2011. The United States lands in second place, with 2.25 GW. India upped it's wind power capacity by 1.48 GW. In terms of total national capacity, that additional amount of wind power means China remains well in first place, with 52.8 GW installed (there remain issues with the amount actually connected to the grid, however). The US takes second place for total capacity, at 42.43 GW. Germany is in third (27.98 GW), Spain in fourth (21.15 GW), and India in fifth (14.5 GW).

Developed in cooperation with Indian electronics manufacturing giant Dixon Technologies, this low-priced, high-performance bulb with a lifespan of around eight years will initially be released in India later this year before making its way stateside and elsewhere in early 2012.

The banking sector's exposure to power projects, according to Reserve Bank of India data, is a staggering Rs 292,342 crore, about the same as India's total corporate tax collection last year. Half the loans sanctioned to existing power plants remain unutilised and fund flow to new projects has almost stopped. The power sector accounts for 7.8% of total non-food credit exposure, up from 4.8% at the end of March 2009.
...
A survey by the Association of Power Producers and Mercados Energy Markets showed projects with a total capacity of 38,748 mw are impacted due to unavailability of coal. Industry officials say that assuming a capital cost of 5 crore per mw, the aggregate default to the banking sector could be Rs 135,618 crore, or 46% of the current banking exposure to the sector.

The survey shows that about 21,300 mw of electricity generating assets, including Lanco's Anpara C, Adani's Mundra, Tiroda and Kawai, are either running at lesser capacities or are idle due to lack of sufficient coal or regulatory clearances to mine.

Nov. 3 (Bloomberg) -- Coal India Ltd., facing a drop in output for the first time in more than a decade, is accelerating its search for overseas assets after talks with Massey Energy Co. and Peabody Energy Corp. failed.Delays in land acquisitions and environmental clearances to develop projects have hindered efforts by the world’s biggest producer of the fuel to boost production, Chairman N.C. Jha said in a phone interview. The government last month allowed state- run Coal India, which has $9.1 billion of cash, to buy unlisted overseas companies.“The government approval allows us to move faster,” Jha said. “We have to try every possible option including acquisitions to meet supply commitments. We’re still struggling to meet our production targets.”Production at Coal India, which mines more than 80 percent of the country’s coal, dropped 5 percent in the first six months of the year because of heavy rains and a one-day strike. Should full-year production decline, it would be the company’s first since at least 1998, Jha said.“The kind of cash Coal India has, it makes every sense to look for acquisitions,” said Prasad Baji, an analyst at Edelweiss Capital Ltd. in Mumbai. “Although we have enough resources in the country, we still need to look outside because of some fundamental problems.”Talks to acquire stakes in a U.S. mine of Massey Energy and an Australian mine of Peabody Energy were inconclusive because of procedural delays, Jha said.Shares of Coal India fell 1.1 percent to 325.90 rupees in Mumbai yesterday. The shares have risen 3.5 percent this year, compared with a 15 percent drop in the key Sensitive Index.
Higher Production
The company, which mined 431.3 million metric tons of coal in the year ended March 31, plans to increase production by about 5 percent this year to meet demand. Daily output rebounded almost 60 percent from the rainy months of August and September to 1.2 million metric tons and is expected to go up to 1.5 million tons by the end of this month, Jha said.Coal India should focus on its domestic business, where the return on investment is higher, Oscar Veldhuijzen, a partner at The Children’s Investment Fund Management UK LLP in London, said in August. The fund is the biggest owner of Coal India after the Indian government, with a holding of 1.04 percent as of Sept. 30, according to data compiled by Bloomberg.India’s estimated coal resource is 267.2 billion tons, of which 105.8 billion tons are proven, according to the coal ministry’s website.

MUMBAI - CLP India Pvt. Ltd., a unit of Chinese power generation company CLP Holdings Ltd., is seeking to acquire majority stakes in Indian coal-based power projects to expand its generation capacity, a senior executive said Thursday. CLP India has also bid to build a 4,000 megawatt power plant in the eastern state of Orissa, Hemant Joshi, senior vice president for corporate finance and treasury, said.
The federal government is expected to award the bid for this plant in the next financial year. Mr. Joshi also said that CLP India will start generation from its 1,320 megawatt power plant in the northern state of Haryana by May.

Behold, the $15 LED bulb



Link

Who is this Dixon Technologies? Also at Rs700 a pop, is there big enough market for it in India?

Behold, the $15 LED bulb



Link

Who is this Dixon Technologies? Also at Rs700 a pop, is there big enough market for it in India?

There is definetly a market. There are constant power cuts. With an investment of 3500 rupees one can get 5 bulbs that use 4-5 w each. Imagine being able to light the entire house on an inverter the size of a can of coke.

In 2010-11, despite slippages, a record power capacity addition of 12,160 MW had been achieved, higher than the previous record for generation capacity commissioned in a single year of 9,585 MW in 2009-10.

To put things in perspective, the capacity added during just two years of the Eleventh Plan (21,745 MW added during 2010-11 and 2009-10) was higher than the cumulative capacity addition achieved during the entire five years of each of the last three Plan periods. The country had seen a capacity addition of 20,950 MW in the Tenth Plan (2002-07), 19,119 MW in the Ninth Plan and 16,423 MW in the Eighth Plan.
Additions vs target

With the capacity addition last fiscal tipping 12,000 MW, and if a similar figure is achieved in the current fiscal, an overall capacity addition of around 48,000 MW is seen as a possibility during the Eleventh Plan, another record by a wide margin.

This is, however, going to be well below even the downward revised target of 62,000 MW pegged for the current Plan period, which started with a target of 78,700 MW.

The overall capacity addition achievement during 2009-10 was about 66 per cent of the target (9,585 MW against a target of 14,507 MW). It was 31 per cent in 2008-09 (3,454 MW against a target of 11,061 MW) and 57 per cent in 2007-08 (9,263 MW against a target of 16,335 MW).

According to Government data, of the 9,263-MW commissioned in 2007-08, the private sector accounted for only about eight per cent. This improved to 25 per cent in 2008-09 (883 MW out of the 3,454 MW commissioned that year) and to 45 per cent during 2009-10 (4,310 MW out of 9,585 MW).

In first-of-its kind in the country, Delhi Metro has constructed two underground substations here that will feed power to the high speed Airport Metro Express and plans to build nine such substations for its upcoming phase-III project.

1.Coal mining was in private hands,but after the good quality coal had been exhausted,the private sector abandoned the mines.As one travels down the Grant Trunk road in the Indian state of West Bengal one can see the ghost towns with the abandoned pit head machinery.

2.The IPO of Coal India was oversubscribed.There is no dearth of capital.

3.Unplanned electrification of the railway lines has not only put the State owned Indian Railways in the red,depriving it of much needed capital for improving safety,but also deprived the factories and farms of electricity.

4.In order to run the farms and factories,the owners are forced to run inverters and diesel/kerosene generators.A paper published by the Institution of Mechanical Engineers,London,showed that India can actually save Diesel oil by running the trains with diesel locomotives,because the much needed electricity can feed the farms and factories and the highly inefficient and polluting gensets can be dispensed with.

5.There is rampant theft of power,thanks to the universal corruption.

6.The state run generating stations have an abysmally low PLF(plant Load Factor).On the other hand,the Centrally run NTPC has a PLF comparable to the highest in the world.Privately run power houses like TATAs and Reliance have achieved PLF exceeding 100%.

7.The solutions stare one in the face.But a weak,coalition led Government continues to pander to politicians and wallows in corruption.My earnest plea is

7.1.Stop Railway Electrification.Divert electricity to the farms,homes and factories.
7.2.Abolish the State Electricity Boards-auction them to Private players
7.3 Stop free supply of electricity to the "KULAKS"(rich farmers)
7.4 Accelerate Hydro Electric Projects.JayPEE ,a private firm has worked wonders in the tiny state of Uttrakhand.
7.5 Encourage NTPC whose PLF is high.

The skyrocketing cost of imported coal is wreaking havoc on the financial solvency of the country's coal plants.

They complained that projects were becoming unviable with coal from Indonesia and Australia becoming costlier, Coal India not in a position to cater to demand and banks leaning on companies who were finding it hard to meet contractual obligations. And, the cascading effect of adverse conditions is being felt by the these industrialists.

The industrialists, who are keen on a higher selling price for the power they generate and account for one-eighth of the country's total electricity generation capacity, rolled out a list of litanies they said could pull the plug on their projects and leave the nation powerless.

Power sector bosses also raised issues regarding green clearances for their projects with environment minister Jayanthi Natarajan.The meeting with Natarajan was dominated by complaints over delays and lack of clarity in environmental clearances as well as issues over lack of land acquisition.

The industrialists also raised concerns about the proposed land R&R Bill, raising objections to the land pricing formula suggested. They warned that pricing land at five times the market rate would lead to this alone accounting for 30% of the project costs.

The underlying theme of the industrialists' submissions was to secure a higher price for their electricity and save projects from becoming unviable due to rise in fuel costs.

Already a power surplus state, Gujarat government's much tom-tommed campaign to further augment the state's power generation capacity through solar energy, too, is facing a roadblock. Well-placed Sachivalaya sources said, with another 578.40 MW of solar power all set to be added by end of this month to the overall power capacity of Gujarat of 13,314 MW, the state government doesn't know where to use it.

In fact, the state's march towards solar power will not end this month end with 578.40 MW. "By the middle of this year, we will have, in all, nearly 1,000 MW of solar power plants, highest anywhere in the country. They will be ready for operation within the next two to six months," a senior official said. Gujarat, a power surplus state by 2,000 MW, is already finding it difficult to sell the traditionally generated power it produces to the national grid and other states, and now solar power is being added to the list.

Bangladeshi and Indian electricity companies have signed a deal to build a $1.5bn (£950m) plant to help address Bangladesh's chronic power shortages.The coal-fired plant will produce 1300 megawatts of electricity, about one fifth of the country's daily needs.
Bangladesh relies on old gas-fired plants for its power and experiences daily electricity shortfalls.However environmentalists say the proposed site for the plant is too close to famous Sundarbans forests.
They argue that discharge from the power plant, like sulphur dioxide and fly ash, will have disastrous consequences for the fauna and flora of the mangrove swamps - a Unesco World Heritage site."If excess pressure is put on the [Poshu] river, that means less water for Sundarbans, which will mean that it will have a definite negative impact on the forests," environmentalist Rizwana Hossain told the BBC.
However, officials say they will take steps to mitigate the impact of the planned plant on the environment.
Sunday's deal was signed in Dhaka by Bangladesh's Power Development Board and India's National Thermal Power Corporation.

AHMEDABAD: Gujarat chief minister Narendra Modi said on Saturday that Gujarat will take on the responsibility of providing power to the entire country in the next two years.

"Gujarat has taken several initiatives in the power sector. Considering the way Gujarat is moving, the state will be in a position to provide power to all states in two years with a power generation capacity of 7,000 MW from the present 4,000 MW," Modi said, while addressing 600 women delegates of 100 public sector units (PSUs) at the Forum of Women in Public Sector (WIPS) held at the Indian Institute of Management, Ahmedabad (IIM-A).

The spectre of ‘forced outages' due to power plants breaking down has come back to haunt Tamil Nadu, veritably at the worst possible time, when the State is reeling under a fierce power shortage. On Sunday, as much as 1,397 MW was lost to forced outages and this was presumably responsible for a 30 per cent load shedding at the peak hours.

Information from the State load despatch centre shows that most of the plants undergoing repairs are unlikely to be put back on stream before mid March.

On Sunday, load shedding rose above 3,000 MW for four hours between 11 a.m. and 2 p.m., which was over 30 per cent of the demand at that time.

Of the 1,397 MW of capacity under repair, 458 MW were under the private sector, including the 330 MW, gas-based PPN power project, which has been down for close to a month now due to a leak in the heat recovery steam generator system. (Sources in the company told Business Line today that the plant would go back on stream any time.)

Another 44 MW was lost due to a problem in the Kaiga atomic power plant in Karnataka, due to “a problem in the turbine-generator system”.

Of the plants run by the State utility, TANGEDCO, one of the units of the North Chennai Thermal Power Station, of 210 MW capacity, has been shut for 23 days and is not likely to be put back in operation before March 10. The problem has been stated as ‘stator coil failure'. Similarly, another 210 MW unit, of the Tuticorin Thermal Power Station has just gone out of operation due to “heavy leak in sea water booster pump discharge header” and will again take a month to be up and running.

Three units of the problematic Ennore Thermal Power Station, of a total capacity of 110 MW each, have been in a state of disrepair— one of them for 213 days.

These vintage power plants produce power at a low cost and their outage costs dear because the State has to purchase power from the market. Yesterday alone, TANTRANSCO, the State transmission utility, purchased 18.347 million units of electricity. The average price of power on the Indian Energy Exchange was Rs 7, which means that TANTRANSCO's purchase was worth about Rs 12 crore. Poor maintenance of the plants is responsible for their frequent outage, said an official of the Tamil Nadu Electricity Board.

the Corporation states that the present restrictions and control (R&C) measures are not sufficient to cover the gap of 3,000 megawatt (MW)-4,000 MW. It is for this reason that the TANGEDCO was forced to resort to unscheduled load shedding. This is essential to ensure the security of the State grid, which is, in turn, a constituent of the southern region's grid.

According to the release, the R&C measures will be implemented based on local needs. Wherever needed, they will be modified. Also load shedding measures will be revised depending upon the demand and supply gap. The TANGEDCO plans to ensure uninterrupted power supply to the extent possible to address the problems faced by students, who will be facing examinations.

The regional chief engineers or the respective officers in-charge of the areas will communicate feeder-wise R&C measures/load shedding details. While the electricity demand ranges from 11,500 MW to 12,500 MW, the total availability from internal generation, share from Central Generating Station and other sources is 8,500 MW.

Moreover, there has been no major capacity addition over the past several years and some of the ongoing projects which were expected to be operational this year are yet to be completed. The projects include Mettur Thermal Power Project Stage 3 (600 MW), North Chennai Thermal Power Project Stage 2 (two units of 600 MW each), NTPC Joint Venture Project at Vallur (three units of 500 MW each), Kudankulam Nuclear Power Project (two units of 1,000 MW each) and NLC TS 2 Expansion (two units of 250 MW each).

The corporation estimates that during day, the increase in the duration of load shedding by one hour in Chennai will mean a reduction in power demand for 200 MW; additional two hours in other parts of the State - 800 MW and the system of power holiday, another 800 MW. In the evening peak hours, the extension of restriction to commercial consumers will provide relief of 400 MW more.

At present, the relief from the HT industrial consumers is around 800 MW.

The release adds that the deficit situation is likely to last a few months. With wind generation picking up and power projects becoming functional one after the other in June, it will be possible to relax some of the measures by then

The first unit of the Vallur Thermal Power Project, jointly executed by the Tamil Nadu Generation and Distribution Corporation and NTPC, was synchronised with the State grid early on Friday.

On production of full load, the State will receive 347 MW from the first 500-MW unit. ....As per the present plan, the second unit of 500 MW will be synchronised by April.

On Thursday, the power managers were in for a pleasant surprise as wind power generation was unusually high. The contribution from wind mills was as high as 2,595 MW on Thursday evening (6-50 p.m.).

Two weeks after it threatened to sue the board of directors of Coal India (CIL), London-based hedge fund, The Children’s Investment Fund (TCI), said it was unhappy with the company’s response and had written to coal secretary Alok Perti to change the top management of CIL, saying the company “lacked necessary leadership to develop operationally”.

DAVID VS GOLIATH
* TCI second largest shareholder in Coal India
* Feels govt-influenced pricing policies are anti-investor
* March 12: Writes to board threatening legal action
* March 15: Writes to government to change management
* To commence second stage of action today

“We are not going to keep sitting and wait for things to happen. It is not our nature to keep quiet. We are moving to the next stage of our action,” Oscar Veldhuijzen, partner, TCI, told Business Standard in a telephonic interview. “You will see the official response on Monday,” he said. Business Standard has reviewed a copy of the letter sent to the coal secretary. TCI is the second largest shareholder in CIL, with 1.01 per cent stake. The government of India owns 90 per cent.Coal India chief financial officer A K Sinha did not take phone calls. Other officials were not available for comment.

In his letter addressed to the top management and board members of CIL on March 12, Veldhuijzen had alleged breach of fiduciary duties by the directors and threatened legal action “if no clear commitments are made public in the immediate future to provide parity of coal prices to import prices and rectifying the other breaches of fiduciary duties which we have outlined.”

In the letter, TCI alleged that Coal India reversed a decision to raise coal prices on instructions from the government. TCI had obtained a letter written by the coal secretary to N C Jha, the then chairman of CIL, through the Right to Information (RTI) Act.

In a separate letter addressed to the government a few days after writing to the board, TCI said Coal India lacked the necessary leadership to develop operationally after the retirement of CMD Partha Bhattacharya. “It is time for the board to hold the management accountable, or for the board and management to be swiftly changed. As the largest shareholder in CI, you should, like ourselves be striving to see the company performs to world-class standards. This is clearly not happening and we urge you to increase the pressure on the board and management to deliver results on operational performance,” it said.

“The Indian government privatised Coal India in order to improve performance, accountability and transparency. It was a sensible plan. However, due to the critical issues outlined in the letter attached, Coal India is failing its country, its shareholders and consequently, the people of India. Coal India holds a crucial key to India’s development but is failing. We urge you to immediately address the points we raise in a transparent manner,” the letter added.

Veldhuijzen further said the board members had a feeling they had not done anything wrong. “We are disappointed. While there has been no official response, individual board members we spoke to after writing the letter are in a state of denial. But, we have documents to prove otherwise,” he said.

Veldhuijzen also said the latest leaked CAG report only substantiated the points raised by the fund's letter to the CIL board last week. "The two issues are closely related. The report shows it is not only Coal India which is selling coal cheaply and looting the people of India. There are also inefficiencies in government allocation and coal is being given away to people close to the government and many of the companies which have got approvals are related to each other."

Requesting the people of India to support TCI’s campaign, Veldhuijzen said, “The government is ruining India’s capital market. Its policies are not only destroying the appetite of international investors and domestic investors in Coal India, they are destroying interest in the Indian capital market itself.”