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India revokes coal to incomplete power stations

29th April 2014

By: Ajoy K Das

Creamer Media Correspondent

  

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KOLKATA (miningweekly.com) - India’s Power Ministry was drawing up a list of thermal power projects that had missed deadlines, with the aim of revoking coal supply assurances to these projects.

The list would include all coal-based power projects that had been scheduled for commercial run between 2009 and 2013, but which had failed to take off. Assured coal supplies earmarked for these projects would be diverted to power plants already completed, but which did not have any fuel supply agreement (FSA) with Coal India Limited (CIL).

According to an official in the Power Ministry, the government had contemplated the levy of a penalty on promoters of thermal power plants for not completing the projects within stipulated timeframes, but it was decided to revoke coal supply agreements with these defaulting projects as other plants running, or nearing completion, were starved of feedstock.

However, a Power Ministry panel, which was appointed to list the projects at which fuel supplies would be revoked, would take into consideration delays in project implementation beyond the control of promoting companies, in which cases the supply agreements would be extended.

The Ministry estimated that a total generating capacity of around 10 000 MW had missed completion deadlines and risked FSAs being revoked once the list of defaulting projects was ready.

Simultaneously, there were projects with aggregated generating capacity of 12 000 MW which did not have FSAs and were unable to start production, the official said.

To date, CIL which accounted for over 80% of domestic coal supply, has concluded 160 FSAs with various thermal power projects and needed to conclude a total of 172 FSAs to enable additional thermal power generation of 78 000 MW.

The miner has missed deadlines of August 2013 to conclude all the 172 FSAs.

Edited by Esmarie Iannucci
Creamer Media Senior Deputy Editor: Australasia

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