NEW DELHI: In a development that makes a mockery of the government’s proclaimed transparency drive, the power ministry has asked the coal ministry not to make public the list of power projects that would get coal linkage under the new mandatory fuel supply agreements with Coal India.
This results from a concern that such a list could hurt projects that do not have coal linkages, as funding agencies would be wary to extend loans to them even if they report substantial progress.
In an official communication, the power ministry has said that while coal ministry has indicated its willingness for signing FSAs of 60,000 MW, more power projects which are under construction have met all milestones of letter of acceptance, but have not really got the linkage. “In case the financial/lending institution do not find these projects in the list, it is likely to have adverse impact on their loan disbursal, pace of implementation and financial closure,” the power ministry letter has said justifying no disclosure of power projects getting benefit of coal linkage from CIL under the terms of FSA.
As per the arrangement worked out by a committee of secretaries (CoS) headed by PMO principal secretary Pulak Chatterjee, CIL has been asked to sign FSA with all power projects that would be commissioned by March 31, 2015 and ensure meet at least 80% of their coal requirement or face penalty. With a Presidential directive given to CIL to implement this decision, the PSU would soon start the exercise to sign fuel agreement with power sector companies. The list of projects getting coal linkage under the scheme were then considered to be made public as per is the case followed by CIL and coal ministry for earlier FSA.
“The list was part of PMO minutes, but there was no instruction to put the list on website. CIL can inform those companies individually through separate letters even without putting the list on the website. It is therefore, again requested that the list of projects for signing FSA during next three years may not be put on the ministry of coal’s website or made part of the minute of the Standing Linkage Committee (Long Term) meeting,” the power ministry’s letter states.
It is estimated that more than 20,000 MW of power projects are at different stages of completion but would not qualify for coal linkage under the new scheme as they may not get fully commissioned by March 2015. Several of these projects have already placed orders for equipment and have tied up funding with institutions or awaiting financial closure. All this could be impacted if it is made clear that fuel supply remains uncertain for these projects.
“Our request is important as it could impact next wave of projects that are scheduled for commissioning in later part opf 12th Plan and early 13th Plan periods. Even as of now funding is a constraint and coal ministry’s move further squeeze money to the sector,” said a power ministry official asking not to be named.
India added close to 54,000 Mw of new generation capacity in 11th Plan and expects to add more than 75,000 MW in 12th Plan. Even with this capacity addition, India power sector would be in deficit with peak shortage of over 12% and energy shortage of close to 10%. Government wants projects to be fast tracked with quicker funding and easy clearance of land and coal mining areas.
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