8:57 pm - Wednesday November 11, 2015

Coal block winners may have to pay 10% upfront

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NEW DELHI: Winners of coal blocks for steel, sponge iron and captive power plants would have to pay 10% of the floor price upfront. Subsequently, they would have to pay on a per-tonne basis an amount that would be calculated by annuitizing the remaining bid value, government sources privy to discussion on the methodology of auctioning coal blocks said.

The sources said norms for allotment to power projects, including those of state generation utilities, would have safeguards to ensure that the benefit of low coal price is passed on to the consumers. Separate dispensations were being discussed for power projects with tariff-based bidding and cost-plus power purchase agreements. The government is set to auction coal blocks, including some in operation and several others close to production, after the Supreme Court in September cancelled all mine allotments since 1993. Last month, the government brought an ordinance to take over the land and infrastructure of the cancelled blocks for auctioning them.

Initial contours of the methodology emerging from discussions, the sources said, indicate that the floor price of the blocks would be worked out by computing their net present value (NPV) through discounted cash flow method.For auction to steel, sponge iron and captive generation units, this intrinsic value would be worked out by using as benchmark the pithead prices for Indonesian and Australian coal available with Argus and Platts, the leading global providers of benchmark price assessment in energy and other commodities.

These prices would be on the basis of FoB (free on board) basis, which requires the seller to deliver goods to a vessel designated by the buyer. A discount of 15% would be applied to account for domestic transportation costs involved in case of imported coal. Besides, prices for three preceding years would be taken into account to guard against adverse impact of short-term volatility.

For allotment to power projects with tariff-based bidding or state generation utilities, the benchmark for calculating the NPV of blocks would be Coal India’s price for corresponding quality — known as gross calorific value band. Under this plan, there would be no auction and, so, no impact on tariff.

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After U.S. President Barack Obama raised the issue of religious intolerance in India, The New York Times published a very strong editorial criticising Prime Minister Narendra Modi for what it calls his “dangerous silence” on a series of communal events in the country.The editorial, by the NYT editorial board, lists recent attacks on churches and reports of Ghar Vapsi or conversion and marks out the Vishwa Hindu Parishad (VHP) for its proposed conversions programme in Ayodhya in March this year, saying the group “was playing with fire.” “Mr. Modi’s continued silence before such troubling intolerance increasingly gives the impression that he either cannot or does not wish to control the fringe elements of the Hindu nationalist right,” the NYT editorial surmised.Full text of the Editorial published in the New York Times on February 6, 2015:What will it take for Prime Minister Narendra Modi to speak out about the mounting violence against India’s religious minorities? Attacks at Christian places of worship have prompted no response from the man elected to represent and to protect all of India’s citizens. Nor has he addressed the mass conversion to Hinduism of Christians and Muslims who have been coerced or promised money. Mr. Modi’s continued silence before such troubling intolerance increasingly gives the impression that he either cannot or does not wish to control the fringe elements of the Hindu nationalist right.Recently, a number of Christian churches in India have been burned and ransacked. Last December, St. Sebastian’s Church in East Delhi was engulfed in fire. Its pastor reported a strong smell of kerosene after the blaze was put out. On Monday, St. Alphonsa’s Church in New Delhi was vandalised. Ceremonial vessels were taken, yet collection boxes full of cash were untouched. Alarmed by the attacks, the Catholic Bishops’ Conference of India has urged the government to uphold the secular nature of India and to assure its Christians they are “protected and secure” in their own country.There is also concern about the mass conversions. Last December, about 200 Muslims were converted to Hinduism in Agra. In January, up to 100 Christians in West Bengal “reconverted” to Hinduism. Hard-line Hindu nationalist groups, like the Vishwa Hindu Parishad (VHP) and the Rashtriya Swayamsevak Sangh (RSS), make no secret of their support for a “homecoming” campaign designed to “return” non-Hindus to the fold. More than 80 per cent of Indians are Hindu, but Pravin Togadia of the VHP says his organisation’s goal is a country that is 100 per cent Hindu. The only way to achieve that is to deny religious minorities their faith.The VHP is reportedly planning a mass conversion of 3,000 Muslims in Ayodhya this month. The destruction of the Babri Mosque there in 1992 by Hindu militants touched off riots between Hindus and Muslims across India that left more than 2,000 people dead. The VHP knows it is playing with fire.Mr. Modi has promised an ambitious agenda for India’s development. But, as President Obama observed in a speech in New Delhi last month: “India will succeed so long as it is not splintered along the lines of religious faith.” Mr. Modi needs to break his deafening silence on religious intolerance.

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