CIL board agrees to fuel to power cos till they develop mines

The board of Coal India has agreed to supply fuel to power units of GMR and Sterlite, among others, till the time they start production from their captive mines.
These power units, which have been allocated captive coal blocks but they were not be developed in time due to absence of environmental clearances, at present enjoy tapering linkage or short-term supply.
As per the tapering coal linkage policy, power plants get coal supply for three years.
"The decision of the government has been communicated... in respect of allowing coal supplies to a few power projects included in the list of 78,000 mw capacity and are having tapering linkage... As indicated in the Presidential Directive dated July 17, 2013 for a period up to September 30, 2016 or till such time the production actually starts from the blocks, whichever is earlier," Coal India Ltd (CIL) said in recent communique the Coal Ministry.

CIL is the biggest coal producer in the country.
"The matter has been deliberated in the 304th board meeting of Coal India wherein the board directed to follow the Ministry of Coal (order)...In letter and spirit for supplying coal to these units under fuel supply agreement within the scope of Presidential Directive," CIL said.

The power plants which have sought the coal beyond tapering period include Kamlanaga Energy Ltd (GMR), Sterlite Energy Ltd and KSK Mahanadi Power Co Ltd.
The government had in December approved coal supply to these power projects as they had failed to develop mines allocated to them due to environment hurdles.

"The CCEA (Cabinet Committee on Economic Affairs) has approved supply of coal to nine of such 24 units in which development of coal block was delayed due to the 'Go' 'No-Go' Policy of the Ministry of Environment & Forests on FSA (Fuel Supply Agreement) basis subject to review/ readjustment wherever necessary," an official statement had said.
While the quantity of fuel admissible under Tapering Linkage Policy will be supplied through FSA, the additional quantities will be supplied on Memorandum of Understanding basis, subject to availability of coal, the statement had added.