Power promises will have to wait | punjab | Hindustan Times
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Power promises will have to wait

The promises made by deputy chief minister Sukhbir Badal of making Punjab power surplus will have to wait as as almost all upcoming thermal plants in the state have been entangled in litigation over issues of coal availability and signing of the Fuel Supply Agreement (FSA) with coal suppliers.

punjab Updated: Apr 14, 2013 23:17 IST
Bharat Khanna

The promises made by deputy chief minister Sukhbir Badal of making Punjab power surplus will have to wait as as almost all upcoming thermal plants in the state have been entangled in litigation over issues of coal availability and signing of the Fuel Supply Agreement (FSA) with coal suppliers.


Consumers in the state will have to suffer long power cuts as the upcoming thermal power plants neither have signed the FSA with coal suppliers nor do they have coal availability.

These thermal plants have filed six litigations with the appellate tribunal for electricity (APTEL), against the Punjab State Power Corporation Limited (PSPCL).

The state government has not provided the required per cent coal linkage to thermal plants that was promised to them. Without this linkage, the FSA could not be signed with Coal India Limited (CIL), that would provide 50% Indian coal and 15% imported coal.

Besides, the issue of No Mega benefits and completion of financial closure also has led to problems. These cases are going on for the past several months between the PSPCL and the power plants under construction at Banawali in Mansa and the other at Rajpura.

Even the Goindwal plant by the GVK group has run into coal problem as it will be at least two years before it gets coal from its own coal mine. The Goindwal Power Plant has also not got mining clearance from the ministry of environment.

The coal will be provided by CIL only after the power producers sign FSA with it but none of these power plants have signed the FSA till date. With the dwindling coal situation at CIL, it is likely that these new power plants will not be able to get adequate coal.

Both these plants together have requirement of around 17 million MT of coal per annum. However, under the current situation, they may get only around 7.5 MT of coal.

To meet their shortfall, the power plants have requested the PSPCL for coal from alternative sources. However, the PSPCL has remained indecisive on the matter and till date has not allowed the direct coal imports or purchase through e-auction to these thermal plants.

Interestingly, the state government had even failed to recognise Talwandi Sabo Power Limited (TSPL), Bathinda, as a mega project following which the TSPL had filed the litigation with APTEL. The Centre, according to rules, provides exemption from customs, import duty and other taxes to mega projects.

The major cases being fought between the PSPCL and power plants are over the issues in coal availability of the projects. Both the Rajpura and Talwandi Sabo power plants have signed Power Purchase Agreement (PPA) with the PSPCL to supply 100% power generated for 25 years on condition of adequate coal linkage provided by the PSPCL.

In September last year, the Punjab State Electricity Regulatory Commission (PSERC) had directed Sterlite, the company executing TSPL, to sign an FSA and not resort to delay the project on this issue. The PSERC also directed the PSPCL to extend full cooperation to TSPL with regard to the signing of the FSA.

The PSERC has failed to provide solution for alternative coal while it had allowed the power producers the use of imported coal by CIL. But this may not provide any immediate relief to thermal plants as the CIL has not yet begun any import of coal and is not expected to do so for at least a year.

When contacted, PSPCL director, generation, GS Chhabra said, "We had provided the coal linkage as per letter of allocation before the bidding process. The upcoming thermal plants have also been permitted for imported coal by Coal India."

When asked that the CIL had not yet started importing coal and a delay would take place in commissioning of thermal plants, he said, "That is another issue. The matter is to provide adequate coal supply and the the PSERC is dealing with it."

Promises not kept?
In September last year, deputy chief minister Sukhbir Badal had announced that the first unit of the 1,980 MW TSPL being developed by Sterlite Energy at a cost of Rs 11,000 crore would be operational by April 2013. Similarly, Sukhbir had also announced that Sri Goindwal Sahib Thermal Plant (540 MW) with an investment of Rs 3,000 crore would start functioning by May 2013 and 1,400 MW Rajpura Thermal Plant being constructed by L&T at a cost of Rs 8,000 crore would start by the end of 2013.