The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Manmohan Singh, on Thursday relaxed the coal tapering linkage policy for nine power projects with investments worth Rs60,000 crore.
The decision will provide a fresh lease to these power projects that ran the risk of running out of fuel supply due to delay in development of their coal mines.
The government had approved tapering coal linkage for 24 thermal power plants for the period between March 2009 and March 2015. However, the Ministry of Power had requested the government that these power projects would need more time before they start producing their own coal as the ‘No Go’ policy, which demarcated several areas as no mining zones for environmental reasons, delayed the development of captive mines.
Considering the demand of these power plants and the power ministry, the CCEA proposed to provide additional coal supplies to these nine units for a period of three years (till September 30, 2016) or for the period they are being affected by the said policy or till production actually begins, whichever is earlier.
CCEA has also said that the position would be reviewed every year for three years by the coal and power ministries and the planning commission.
CCEA has also approved a hike in foreign investments to 62% from 49% for Axis Bank subject to the aggregate foreign institutional investors holding not exceeding 49% of the paid up equity share capital of the bank. The approval would result in foreign investment of about Rs7,250 crore in the country.
It also approved the guidelines for financial assistance to the sugar industry for payment of cane price arrears.
Meanwhile, stocks of Axis Bank touched the day’s high on the news. The stock hit the day’s high of Rs 1,319 before settling at 1,2907.05 or 1.10% higher from the previous day’s close on the National Stock Exchange.
Agencies add: The CCEA also approved Air India’s proposal to sell its five long-haul Boeing 777 aircraft to Etihad Airways. Air India had earlier this month finalised the deal with the Abu Dhabi-based carrier, which has also picked up 24% stake in Jet Airways worth over Rs2,000 crore.
Though both Air India and Etihad have remained tight- lipped about the deal size, it is estimated that Air India could get $300-350 million through the sale of five of its Boeing 777-200 LR (Long Range) planes which have an average age of six years. The money would be utilised by Air India to partly pay off its huge debt and liabilities of over Rs20,000 crore.
Other proposals cleared were the amalgamation of State Farms Corp of India with National Seeds Corp, both wholly owned public sector undertakings under the agriculture ministry and interest-free loans worth Rs6,600 crore to sugar companies.
The rate-free sugar loans would be extended on condition that mills use the money to pay cane farmers and clear off cane arrears.