PowerMin: CIL must supply coal via MoU route till FSAs in place

Also,as against the need for 615 MT in 2016-17 (the terminal year of the 12th Plan),the miner’s projected supply of 415 MT indicated a demand-supply gap of 200 MT.

Written by Priyadarshi Siddhanta | New Delhi | Published: May 11, 2012 12:42:31 am

The power ministry has asked the coal ministry to instruct Coal India Limited (CIL) to continue supplying coal to power plants through the memorandum of understanding (MoU) route till the time the ongoing exercise of inking of fuel supply agreements (FSAs) are completed,failing which capacity addition of nearly 25,000 Megawatts will get stranded.

In a May 2 letter to coal secretary Alok Perti,power secretary P Uma Shankar,while reminding that the power ministry’s earlier plea on April 9 to this effect went unheeded,said that plants either commissioned or likely to be fired during 2009-10 to 2011-12 need continuous supply of coal and accordingly CIL should be instructed to supply the fuel during the current fiscal through the MoU route till the time the FSAs are signed.

He asked Perti to direct CIL to supply coal to the tune of 80 per cent to those plants,which have entered into long term power purchase agreements (PPAs) with the distribution companies.

“While we are yet to be informed about the action taken by the coal ministry and CIL in this regard,it has been brought to our notice that Central Coalfields Limited (a subsidiary of CIL) has issued a circular on April 19 indicating their refusal to accept a railway rake programme for May 2012,in the absence of FSA. This goes against the request made by the power ministry,” Uma Shankar told Perti.

Uma Shankar’s note to Perti comes close on the heels of the power ministry recently conveying the Prime Minister’s Office (PMO) that CIL’s ability to supply only 347 million tonne (MT) against a requirement of 410 MT in 2012-2013 is “of grave concern”.

Also,as against the need for 615 MT in 2016-17 (the terminal year of the 12th Plan),the miner’s projected supply of 415 MT indicated a demand-supply gap of 200 MT. Electricity producers,sandwiched between paucity of domestic coal and its rising import costs (currently hovering around $110 a tonne) now see a bleak future for their ambitious projects,the ministry told the PMO in a recent note.

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