KOLKATA: All power projects receiving coal from Coal India on an ad-hoc basis which was slated to stop after March 2015, will keep receiving coal till coal block e-auctions are complete.
This assumes importance since completion of e-auction by March 2015 now seems uncertain as a clutch of former block allocates have filed petitions in the court, leading to delays in completion of coal block e-auctions.
Coal was being supplied to power projects on the assumption that they would not require any coal from Coal India going forward because blocks allotted to them would start producing in the future. However, the Supreme Court declared all such coal block allotments as illegal and the ad-hoc supply of coal was to stop after March 2015.
Termed tapering linkages, such coal supply commitments assume allotted coal blocks will slowly increase production and hence requirement of coal supplied by CIL will reduce. Under this category of supply commitment, supplies are to stop on the fourth years with reduced volumes being sold to the power project every year. In the absence of any block and a reduced supply from Coal India, these power projects faced an uncertain fate.
The government has recently decided that CIL will keep supplying coal to them the volume for which would be maintained at this year's level till e-auctions are complete.
Coal India will continue supplying coal to all power projects which had their blocks de-allocated following a Supreme Court order that termed them illegal.
There were a host of power companies that were receiving coal from Coal India on an ad-hoc basis, and they were to receive this coal till such time the blocks were to start producing coal. However, the government will review each power projects status and its requirement of coal from Coal India after March 2015.