Fuel supply for UP power project generates heat

Even before the bids for the much-awaited 1,000-Mw Anpara C power project in Uttar Pradesh could be opened, a dispute has broken out over the fuel supply agreement (FSA).

Northern Coal Fields Ltd (NCF), the appointed fuel provider for the project, is insisting on signing the supply deal at the earliest or effect a break in the linkage.

On the other hand, the Uttar Pradesh Rajya Vidyut Nigam Ltd (UPRVNL)wants the NCF to enter into an agreement with the developer. This however, can only happen after the bids are opened. The developers want the FSA to be of the same tenure as the power purchase agreement.

Essar Power Head (Business Development Group) Mukesh Tyagi said, "Coal is the lifeline for the success of the project. A 100 per cent certainty is required on this front. FSA shall run concurrent with the tenure of the power purchase agreement, which is of 29 years. UPRVNL should guarantee an FSA of the same duration."

"It is for the developer to secure the fuel supply agreement, not for the facilitator, which in this case, is UPRVNL. The FSA is for 3.6 million tonnes per annum whereas the requirement is in the range of 4.5 MTPA for the project," industry sources added.

Anpara C power project is a pit-head station with linkages from Northern Coal Fields Ltd. The total project cost would be around Rs 4,000 crore.

Work on the project had come to a halt following strong opposition from power sector employees and Left parties on the privatisation issue. Reliance Energy, Essar Power, Torrent Power and Lanco Kondapalli are in the race for the thermal power plant in the Sonebhadra district of the state.