By Sudarshan Varadhan
NEW DELHI (Reuters) – A utility owned by India’s richest state Maharashtra is reviewing four bids received in a tender to supply two million tonnes of imported coal and expects to finalise details next month, it told Reuters on Thursday.
The Maharashtra State Power Generation Co Ltd (Mahagenco) said it had received bids for the tender, its largest in at least three years, from Adani Enterprises, Chettinad Logistics, Gandhar Oil Refinery and Mohit Minerals.
India has asked utilities to step up imports to the highest levels in at least six years in response to higher coal demand as power use soars. Maharashtra is India’s most industrialized state and its biggest power consumer.
“Mahagenco is in the process of ascertaining the cost reasonability and financial viability of the received bids. It is expected that Mahagenco will finalise the tender by the (middle) of April 2022,” the utility told Reuters in a statement.
The directive to boost imports comes at a time when global prices are trading at steep premiums to average 2021 levels following Russia’s invasion of Ukraine. Higher imports by India could put further upward pressure on prices.
Expensive imports could add to the financial woes of state government-owned, debt-laden power distributors, which have overdue payments of nearly $15 billion to power generators.
India’s southern state of Andhra Pradesh cancelled bids made for two separate tenders by Adani to supply imported coal as the prices quoted were too high, the first such cancellation in recent years over high prices.
Power generation in India surged at its fastest pace in three months in March, while power cuts hit the highest level since October.
Demand for power could rise further after weather officials forecast maximum temperatures above normal in April in most parts of the northwest, northeast and central regions.
(Reporting by Sudarshan Varadhan; Editing by Jason Neely and Jan Harvey)
