Cracking the whip on power firms, the Coal Ministry has cancelled the coal linkages of 25 captive power plants with a combined capacity of 1,292 MW and requiring 5.844 million tonnes of coal per annum.
It was noted that despite a considerable lapse of time, these 25 CPPs failed set up power plants in spite of having been accorded coal linkage by the ministry between 1996 and 2006. Apart from this, “in seven cases appropriate directions have already been issued for signing the fuel supply agreement (FSA).”
The 25 CPP where cancellation has been approved were to generate around 1292 mega watt to electricity and involved coal requirement of 5.844 million tonnes per annum. The decision follows recent exercise undertaken by the CIL on the directions from the Ministry of Coal to review the old cases of Captive Power Plants (CPP) having “linkages” where coal was not being drawn nor any Fuel Supply Agreement was signed. As per the extant policy, a large number of CPPs were given linkages of coal and were required to set up their plants and enter into FSA for supply of coal. However, it was noted that despite considerable lapse of time a large number of them did not set up the power plant despite having been accorded coal linkage by the Ministry.
CIL reviewed the status of these projects after seeking response from the concerned linkage holder and, thereafter, made certain recommendations regarding continuity or otherwise of the linkage in respect of CPPs under review.
It may be recalled that under the New Coal Distribution Policy (NCDP) announced in October 2007, it has become mandatory for the new consumers having Letter of Assurance (LOA) to meet all the stipulated milestones within specified period failing which the Commitment Guarantee is liable for enforcement and LOA may also be withdrawn. Therefore, there is emphasis on close monitoring of the commissioning of the project for which LOA has been extended.
This monitoring is an on-going process for eliminating the non-serious developers and supporting serious developers in setting up their project for which LOAs has been accorded.
The Ministry of Coal has recently recommended a large number of LOAs for the 11th Plan Priority Power Projects with certain special milestones. The progress of these project and achievement of milestones would be monitored closely and non-fulfillment of milestones may lead to enforcement of Commitment Guarantee and withdrawal of LOA.
It was noted that despite a considerable lapse of time, these 25 CPPs failed set up power plants in spite of having been accorded coal linkage by the ministry between 1996 and 2006. Apart from this, “in seven cases appropriate directions have already been issued for signing the fuel supply agreement (FSA).”
The 25 CPP where cancellation has been approved were to generate around 1292 mega watt to electricity and involved coal requirement of 5.844 million tonnes per annum. The decision follows recent exercise undertaken by the CIL on the directions from the Ministry of Coal to review the old cases of Captive Power Plants (CPP) having “linkages” where coal was not being drawn nor any Fuel Supply Agreement was signed. As per the extant policy, a large number of CPPs were given linkages of coal and were required to set up their plants and enter into FSA for supply of coal. However, it was noted that despite considerable lapse of time a large number of them did not set up the power plant despite having been accorded coal linkage by the Ministry.
CIL reviewed the status of these projects after seeking response from the concerned linkage holder and, thereafter, made certain recommendations regarding continuity or otherwise of the linkage in respect of CPPs under review.
It may be recalled that under the New Coal Distribution Policy (NCDP) announced in October 2007, it has become mandatory for the new consumers having Letter of Assurance (LOA) to meet all the stipulated milestones within specified period failing which the Commitment Guarantee is liable for enforcement and LOA may also be withdrawn. Therefore, there is emphasis on close monitoring of the commissioning of the project for which LOA has been extended.
This monitoring is an on-going process for eliminating the non-serious developers and supporting serious developers in setting up their project for which LOAs has been accorded.
The Ministry of Coal has recently recommended a large number of LOAs for the 11th Plan Priority Power Projects with certain special milestones. The progress of these project and achievement of milestones would be monitored closely and non-fulfillment of milestones may lead to enforcement of Commitment Guarantee and withdrawal of LOA.
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