Panel for extending short-term coal linkages again

The Standing Linkage Committee (Long-Term) has recently recommended that the supply of coal to those units who were getting supplies on tapering basis should continue to get supplies at the same level of quantity

Short-term coal linkages to end-use plants in sectors such as power, whose coal blocks were cancelled by the Supreme Court, should be further extended to June-end, an inter-ministerial panel has recommended.

The Standing Linkage Committee (Long-Term) has recently recommended that "the supply of coal to those units who were getting supplies on tapering basis on the date of Supreme Court judgement should continue to get supplies at the same level of quantity till June 30, 2015, since these are running plants," said that minutes of the meeting.

However, it said, in case supply of coal starts from schedule II blocks (producing) allocated to fresh allocatees in the current auction process, "this dispensation shall cease in respect of the units linked to such coal blocks."

The Committee recommended that the decision should apply to all the sectors.

Tapering Linkage is the short-term linkage provided to those coal consumers who have been allocated captive coal blocks for meeting the fuel requirements but the mines could not be developed on time.

The Coal Ministry had earlier in a letter to Coal India had said, "With the approval of the competent authority, it has been decided that the projects which had tapering linkage but whose coal blocks have been deallocated by the Supreme Court judgement, may be allowed to maintain tapering linkage ...Till March 31, 2015, subject to review after that date.

The ministry had said that the dispensation will apply to those power plants which are part of 78,000 MW list approved by the Cabinet Committee on Economic Affairs (CCEA) and are running, and they have long-term power purchase agreements (PPAs).

The Power Ministry had earlier recommended that all those power projects which had tapering linkage but whose coal blocks have been deallocated by the Supreme Court judgement, the Coal Ministry may consider maintaining the tapering linkage till the coal block auction process is completed.

The apex court had in September last year cancelled that licenses of 204 coal blocks.