Says will review actual status before inking fuel supply pacts

The Coal and Power Ministries are at loggerheads over milestones achieved by several upcoming power projects.

“What is being claimed in terms of achievement of milestones and preparedness does not match the ground reality,” said a senior Coal Ministry official. This has come to light when the Ministry and Coal India reviewed the status of power plants scheduled to be commissioned from 2012 till 2015.

Despite the uncertainties of fuel supply indicated by the Power Ministry, the projects have achieved all milestones outlined in their Letters of Assurance (LoAs). The LOA lists nearly 10 milestones that need to be achieved during the process of setting up of a power plant.

For instance, according to the Power Ministry, 40 units are to be commissioned in 2011-12. But, Coal Ministry data show 30 units. Even in the case of these 30 units, there are many cases where date of commissioning has been achieved only for first unit out of the three units.

The Coal Ministry also found cases where the date of commissioning has not been confirmed by the Power Ministry. For some, either the State Pollution Control Board has not given clearance or power purchase agreement been signed only with trading firms without back to back arrangements with State Electricity Distribution Companies (Discoms).

Coal India is under fire from all quarters for not sealing fuel supply agreements with power producers.

When contacted, Power Secretary P. Uma Shankar termed the Coal Ministry’s claim as ‘vague.’

“Unless the plant is ready, it cannot receive coal. There may be an exception. If there are any such cases, the Ministry should be specific,” said Uma Shankar.

However, the Coal Ministry is of the view that it is necessary to obtain the actual status in each case before signing of fuel supply pacts with plants.

(This article was published on November 25, 2012)
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