The Association of Power Producers, which represents the companies that were allocated coal linkages, has written three letters to Coal Minister Piyush Goyal and Cabinet Secretary P K Sinha since last month on "inordinate delay in issuance of Letter of Intent (LoI) by Coal India subsidiaries."
"Even after nearly three months, there is no clarity as to when LoI will be issued to the successful bidders," the Association wrote to Goyal on December 7.
Coal India had conducted the auction for independent power producers with PPAs on September 11-12 where the bidder quoting a higher discount to its existing tariff would get the coal.
Adani Power, GVK Power, Bajaj Hindustan, GMR and Reliance Power quoted discounts in their power tariff in range of 1-4 paise per unit under the Scheme for Harnessing and Allocating Koyala Transparently in India (SHAKTI).
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"In the auction scheme, it was envisaged that LoI will be issued by CIL subsidiaries within 15 days of conclusion of auction," the Association wrote.
Once LoI was issued, the power producers were to amend the PPAs within 45 days to reflect the discount they had quoted in the auction and arrange for approval of the electricity regulatory commission. Thereafter, Coal India Ltd (CIL) had 30 days to sign Fuel Supply Agreements (FSAs) with the successful bidders.
"The situation is compounded by absence of any Special Forward e-Auction from CIL subsidiaries in last four months, which was being used by these power producers to source their coal requirements as a stop gap arrangement till coal linkage auctions was carried out," it wrote.
The 10 plants, it said, will have to "shut down/curtail their operations for want of coal from January 2018 onwards, thereby creating more financial stress to its stakeholders and lenders."
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