Oct 2012 Hindustan Times (Chandigarh)
Gurpreet Singh Nibber
Sign coal pacts for upcoming power plants: PSERC to firms STERN ORDER Regulator tells companies executing Talwandi Sabo and Rajpura thermal power projects to sign fuel supply agreements with mine firms to offset potential crisis
DUE TO UNCERTAINTY OVER COAL SUPPLY, THE TALWANDI SABO PLANT DEADLINE HAS ALREADY BEEN EXTENDED BY NINE MONTHS

CHANDIGARH: The state government may have been making tall claims of the thermal power plants at Rajpura and Talwandi Sabo being on track for timely commissioning, but the Punjab State Electricity Regulatory Commissi o n ( PSERC) has pointed to the absence of a key ingredient -assured supply of coal. It has asked promoters of both the plants to sign fuel supply agreements (FSA) with the respective mine firms.

“Without fuel supply agreements, how could these two plants function?” — the PSERC has raised the question in its orders issued to the firms. The projects are being built under the public-private partnership (PPP) mode. While the Rajpura thermal plant is being executed by Larsen & Toubro, the Talwandi Sabo plant was allotted to the Vedanta group that has further hired Larsen & Toubro and Chinese firm Shandon Electric Power Construction.

Due to uncertainty over availability of coal, the deadline of the Talwandi Sabo plant has already been pushed ahead by nine months. Now, the plant’s first unit is expected by September 2013. The Rajpura plant is also not certain to meet the January 2014 deadline for its first unit.
Last Fri day, the PSERC issued directions to Nabha Power Li mit e d ( NPL), t he special purpose vehicle (SPV) fo r t he 1,400 MW pl ant at Raj p u ra , to sign the FSA with South Eastern Coalfields Limited (SECL). While in an order passed last month, similar directions were given to Talwandi Sabo Power Limited (TSPL), the SPV created for a 1,980 MW plant, to sign the FSA with Mahanadi Coalfields Limited (MCL).

The P unjab State Power Corporation Limited (PSPCL) had, in December 2008, arranged a letter of assurance (LOA) from SECL for supply of 5.55 million tonnes of coal every year to Nabha Power Limited. But the FSA remains to be signed. Now, as per fresh terms circulated by the SECL, it can supply only 80% of the total requirement for a period of five years, as against the 25 years discussed in the LOA earlier.

“It has become necessary to sign the FSA as proposed by the SECL. The consequences of not signing the FSA will result in losing coal linkage and the project would not have any coal supply,” said a petition filed by the PSPCL before the PSERC that sought the directions to the Rajpura project firm.

In case of the Talwandi Sabo project, the LOA arranged from MCL said that 5 million tonnes of coal would come in 2011-12, and 7.7 million tonnes per year from 2012-13 onwards. However, recently, MCL reduced the allocation by 50%, due to which the FSA has been delayed.