Economy

APP pushes for Tripartite Fuel Supply Agreement fix responsibility

Our Bureau Kolkata | Updated on October 23, 2021

The delegation of APP met Union Minister for Power

Amid rising demand for power and shortage of coal supply, the Association of Power Producers (APP) have pushed for a Tripartite Fuel Supply Agreement between generators, coal companies and railways so as to delineate responsibilities and obligations of stakeholders involved. It has also called for putting in place an equitable penalty mechanism to ensure balanced distribution of risks.

The suggestion was given by a delegation of APP which met the Union Minister for Power and NRE R K Singh on Friday.

They also urged for ensuring adequate liquidity for the generators by way of timely payments by the discoms.

This apart, they sought for a remedy for the current disbalanced contractual provisions for coal procurement, wherein the generators have a stringent and unavoidable obligation of making the full payment in advance for the coal while the coal companies and Railways have much lighter or even nil obligation to ensure that the desired quantity and quality of coal reaches the generators.

Singh has asked APP to send the demands in a memorandum that can be forwarded by the ministry to states and other stakeholders. With regard to the payment liquidity issues, he asked IPPs to sit with CPSU generators and come to a common agreement to start regulation of power to defaulting states, in order to avoid the current practice of selective payments being made to certain generators.

Non-power sector urges resumption of supplies

Meanwhile, the non-power sector consumers including captive power plants, has sought for resumption of coal supply to the sector.

The Coal Consumers’ Association of India has written to the Coal Secretary for resumption of “some amount of coal supply” to the non-power sector which would be crucial for the sustenance of the industries.

“The non-power sector consumers including captive power plants, aluminium, steel, cement, sponge iron, chemical, paper etc have long been facing an acute shortage of coal as supply via rail mode was halted from most of the CIL subsidiaries,” it said in the letter.

The situation got further worsened as supply to NRS consumers has been completely halted via road mode as well.

Besides, coal companies have been asked to refrain from conducting any further e-auctions of coal where non-power sector can participate. Lack of fuel at the plant-end is forcing many NRS consumers to stall their operations while several others are on the verge of closure, it said.

“Steadily rising global coal prices as well as expensive ocean freight rates have also rendered import of coal almost impossible for these consumers in order to make up for the lack of supply from indigenous sources,” it said.

Published on October 23, 2021

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