No coal,Talwandi Sabo plant runs into trouble

No coal,Talwandi Sabo plant runs into trouble

Punjab Deputy Chief Minister Sukhbir Singh Badal’s lofty plans to make state power surplus are beginning to come apart,thanks to the Union government.

Punjab Deputy Chief Minister Sukhbir Singh Badal’s lofty plans to make state power surplus are beginning to come apart,thanks to the Union government.

The first unit of the Talwandi Sabo Power Limited (TSPL),which was to be commissioned on April 13,has been delayed till at least July with sources claiming that work on the plant has “virtually” shut down.

Faced with an acute shortage of coal following Coal India cutting down on its promised share to the plant,Sterlite Energy Limited (SEL) — the company setting up the plant — is likely to find it financially non-viable to start production,sources said.

The plant,though undertaking commission trials,will be able to run only at 30 to 40 per cent of its capacity because of shortage of coal and at this rate,the company will not be able to sustain the running cost of the plant,said a company source.


He added that the company is already facing queries from its financiers,who have invested almost half of the Rs 10,000 crore that has gone into the construction of the plant. The contractor at the plant is awaiting payment and supply of fresh construction material has been stopped.

Refusing to comment on the current status of the plant,Principal Secretary (Power) Anirudh Tewari admitted that coal linkage was emerging as a big problem for the power plants slated to be commissioned in Punjab. “The allotment letter of coal is issued by Coal India,a Union body,and they have reduced their commitment from 100 per cent to 80 per cent,” he said.

Out of the 80 per cent coal which Coal India has agreed to provide,15 per cent coal is to be imported while the rest will be domestic. Sources said that the process of importing coal is going to take over one-and-a-half years. Till then,Talwandi Sabo will only receive coal component of 65 per cent.

“In Talwandi Sabo,the initial project requirement of coal was based on the fact that it is a 1800 MW project. However,the project is now of 1,980 MW. Despite repeated reminders to Coal India and several meetings of the chief minister with the Prime Minister and the coal minister,Coal India has not revised its commitment,” said Tewari.

A company official said,“Since Coal India has not taken our plant’s capacity into account while fixing our requirements,we are expecting to get 50 per cent of the 10 million tonnes that will be needed to run the plant. Also,the quality of the domestic coal promised by Coal India has been downgraded from ‘e’ to ‘e/f’,which is going to reduce the output even further.”

The imported coal considered to be of high calorific value will also need special treatment plants to be set up. “Each of these treatment plants cost Rs 500 crore,” he added.

SEL is a Vedanta group company,which is a major player in power sector. TSPL was incorporated as a special purpose vehicle by the erstwhile Punjab State Electricity Board to construct a 1980-MW plant in three units of 660 MW each. The first unit was to begin by August 31,2012 but the deadline was revised.