Power firms want Punjab to fuel their plants,govt says won’t share its supply

The state government has,however,refused,stating that it was the companies’ responsibility to ensure adequate coal linkage.

Written by Chitleen K Sethi | Chandigarh | Updated: April 16, 2014 11:23 am

The Punjab government’s assurance to supply power at cheaper rate to consumers by the end of this year,when “the power situation will turn comfortable after thermal plants start generation,may remain just an assurance as the state seems to be on a direct collision course with the two companies setting up the Rajpura and the Talwandi Sabo power plants.

Faced with an acute shortage of coal,L&T Power Development Limited —- the company setting up the 1,400 MW power plants in Rajpura —- and Sterlite Energy Limited (SEL) —- setting up the 1,980 MW power plant in Talwandi Sabo —- have asked Punjab government to “arrange” for the fuel for their plants pointing out that it was the state’s responsibility to do so.

The state government has,however,refused,stating that it was the companies’ responsibility to ensure adequate coal linkage. The state also made it clear that it will not share with the two companies any coal from the Pachwara Central Coal Block alloted to Punjab. It also warned that if the commissioning of the plants is delayed,the government will take penal action.

While the first unit of the plant at Rajpura is expected to be commissioned early next year,the Talwandi Sabo plant is expected to be commissioned in August this year. Though the setting up of the Rajpura plant is going ahead of schedule,work at the Talwandi Sabo plant has virtually come to a halt. Shortage of coal can lead to unwarranted delays in commissioning of the plants or even immediate shutting down of operations.

Both the companies have been hit hard by the “rationing of coal” announced by the Centre. The state-run Coal India Limited has made it clear that it will not be able to meet more than 80 per cent coal requirement at the thermal plants. Almost 15 per cent of this will be imported coal —- quality-wise it is inferior to indigenous coal and requires additional investment by the power plant companies before it is made fit for use. Feeling the heat,the companies are now looking up to the state government to get them coal.

Both the companies had in 2012 claimed that it was the state government,which was supposed to ensure a steady supply of coal once the projects were underway. Both had filed petitions with the Punjab State Electricity Regulatory Commission (PSERC) to this effect.

The SEL had contented that it was PSPCL which had to arrange coal for the Talwandi Sabo Power Limited (TSPL) in accordance to the agreement signed by the PSPCL (then PSEB) and SEL. “Either Punjab government should arrange for coal or increase the rates at which the state will buy the power thus produced. Since we will be procuring coal from other sources,which includes importing the fuel,the investment will subsequently increase. We will not be able to sell power at the rates which have been agreed upon with the state government,” said a senior functionary at the Talwandi Sabo power plant. L&T had in its petition added that the PSPCL could arrange for coal from the Pachwara Central Coal Block which was allotted to the Corporation.

But Punjab is adamant that the issue is between the Centre and the companies. “We cannot give any coal to these plants. They were supposed to arrange for their own coal. It was made very clear to them at the beginning of the project. The Pachhwara block is for feeding our own plants and there is no way any coal can be shifted to these plants,” said KD Chaudhry,MD Punjab State Power Corporation Limited.

Recently,the PSERC rejected both the petitions upholding the state government’s contentions. The two companies have now moved the Central Electricity Authority in appeal against the orders of the PSERC.

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