Nabha Power Ltd told to sign fuel supply pact
Jangveer Singh
Tribune News Service

Chandigarh, October 8
The Punjab State Electricity Regulatory Commission (PSERC) has directed Nabha Power Limited (NPL), Rajpura, to sign fuel supply agreement (FSA) with South Eastern Coalfields Limited (SECL).

The order comes in the light of the shortage of domestic coal with government coal mines failing to deliver even committed coal in some cases. The order is expected to force NPL, which is promoted by Larsen and Toubro Limited, to go in for advance booking of coal.

The Centre had earlier approved coal linkage to the Rajpura project. To operationalise this coal linkage, NPL needs to sign fuel supply agreement with the coal mine concerned.

The commission has in its order advised NPL to vigorously pursue with authorities for maintaining the status quo with respect to quantity/quality/grade/origin of coal committed as per the letter of assurance. It has also asked Punjab State Power Corporation Limited (PSPCL) to coordinate with NPL and pursue the matter with the state and Central governments.

PSPCL had entered into an agreement with NPL to establish, operate, maintain, generate and supply power from the thermal power project of 2x700 MW (1400 MW) capacity at Nalash village, Rajpura.

Fuel linkage was arranged by PSPCL before the submission of bids. South Eastern Coalfields Limited issued the letter of assurance for 5.55 million tonnes per annum of coal in December 2008.

Nabha Power Limited informed PSPCL that SECL had circulated draft MoU along with the FSA with certain changes that are different from the earlier proposal. Coal India Limited’s subsidiary will supply 80 per cent of coal for a period of five years against 25 years as envisaged earlier and arrange for the balance imported coal at the prevailing imported coal prices.

PSPCL said it had become necessary to sign the FSA as proposed by SECL. It said the consequences of not signing the agreement as and when proposed by SECL might result in coal linkage being lost in which case the project would not have any coal supply.

The commission noted that the respondent appeared to have a few other concerns and apprehensions, which have been brought out in its reply to the petition and subsequent submissions.

It, however, said given the current scenario of shortage of power in the state, the commission considered it of utmost importance and in the interest of all stakeholders that the project was commissioned in time.