Environment nod still pending; tapering linkage, too, hangs fire

Four months after the Group of Ministers (GoM) gave its nod for mining at Essar Power’s Mahan coal block and providing tapering linkage till production starts at the 1,200-MW power plant, the project is yet to get coal supplies.

Generally, tapering linkage is provided for three years, where supplies decrease with every following year.

The Ministry of Environment and Forests (MoeF) is yet to give its go-ahead for mining at Mahan, a Government official told Business Line. Besides, the Power Ministry has not sent its proposal for tapering linkage, the official said, adding that “unless the nodal Ministry sends the proposal, it cannot be put up to the Standing Linkage Committee (long-term).”

The power plant in Singrauli, Madhya Pradesh, set up after an investment of Rs 7,200 crore, is idling for want of fuel. Prashant Ruia, Group Chief Executive of Essar Group, had met Coal Minister Sriprakash Jaiswal to discuss coal linkage to the Singrauli plant.

On May 30, the GoM, headed by then Finance Minister Pranab Mukherjee, had suggested that the Power Ministry include the project in the priority list of the Twelfth Five-Year Plan, and forward its recommendations to the Coal Ministry for consideration of tapering linkage.

The Coal Ministry is not sure if any coal will be available for tapering linkages even if the Power Ministry sends its recommendation.

“The coal requirement for both the plants (Essar and Hindalco attached to Mahan block) would be at least 2 million tonnes every year. There is already a gap between demand and domestic supply of coal. So, it has be seen if there will be any available coal for tapering linkage,” said the Coal Ministry official.

The Standing Linkage Committee (long-term) is headed by Additional Secretary Coal Zohra Chatterji, and decides on tapering linkages.

Coal is provided at 85 per cent plant load factor of annual coal quantity (ACQ). A coal mine takes at least six years to achieve peak production.


(This article was published on September 30, 2012)
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