News Brief | November 2014
Coal block users face Rs 10,000 cr fine
After the cancellation of coal blocks, players of operational units may have to shell out Rs 10,000 crore as fine, says ratings agency Crisil. "Players who have operational coal blocks will witness a sharp decline in profitability post 2014-15, as they would have to substitute captive coal with imported coal which is about four times more expensive," it said in a statement. "For these cancelled blocks, the court granted six months to shut down operations. Moreover, players with operational blocks have been asked to pay a penalty of Rs 295 per tonne of coal mined up to 2014-15, which will translate to Rs 100 billion (Rs 10,000 crore)," it said. Utilities will be hit, and power purchase cost for utilities will rise, particularly in West Bengal and Punjab, where it would increase by Rs 0.5-0.8 per unit given that these plants account for a large share of power purchase.