my previous story on the supreme court hearings into the captive coal block allocation was a bit of a curtain-raiser. it said when hearings resume on monday, the biggest question before the judges will be re: what to do with the blocks where mining has already started.
as things turned out, a set of industry associations and the government proposed a compromise formula to the apex court. among other things, they proposed that the SC levy a penalty of Rs 295 per tonne on coal mined — in the past and from now on. they also recommended that power producers with captive coal blocks be allowed to henceforth sell power only through longterm power purchase agreements (PPA) and not in the merchant market. in the story out today, i argue that this is a flawed idea.