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Coal India Asked to Light up 30 Ongoing Power Projects

Relief for southern states as Ministry asks coal behemoth to provide ‘tapering linkages’

Published: 31st March 2015 06:00 AM  |   Last Updated: 31st March 2015 07:45 AM   |  A+A-

NEW DELHI: In a move that would help 30 power companies that are nearing their project completion and scouting for fuel supply, the Coal Ministry has directed Coal India Limited (CIL) to supply coal till further arrangements are made.

Anil Swarup, coal secretary said, “Which ever company has got a block and their project requires coal, we will give them tapering linkages. That’s the commitment we are working on.”

There are around 18 coal blocks, which are recently put for auction but will come under production in next 2-3 years period. Meanwhile, almost 18,000 MW of capacity, either completely ready or close to completion needs fuel linkages.

These 30 power projects are mainly in the southern parts of the country, facing acute shortage of power. With the assurance given by the Coal Ministry, these projects can hope for early fuel supply arrangements.

Coal Minister Piyush Goyal earlier said, “We have a committee which is exploring various options of what we should do with the linkages. We have not decided on particular course of action. Once the committee gives its report, we will take a considered view in continuation of our effort to bring transparency and integrity in the whole system.”

But according to sources, it is certain that CIL is going to provide them with tapering linkages and the coal behemoth has signed 161 fuel supply agreements (FSAs) with projects for a capacity of 73,675 MW.

Tapering linkage is the short--term linkage provided to those coal consumers who have been allocated captive coal blocks for meeting the fuel requirements but the mines could not be developed on time.

According to industry experts, loss-making discoms have been shying away from signing pacts with power producers for long-term supply of power because they do not want to bear the additional cost.  

Earlier, power projects were directly awarded coal linkages. However, scarce resources and an increasing number of applicants prompted the government to introduce a system of awarding letters of assurance that required the standing linkage committee approval.

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