Govt may soon rationalise coal linkages of 40 power projects

The move is expected to save up to Rs 6,000 crore in logistics cost

The government could soon finalise the proposal for coal linkage rationalisation and swapping arrangements of about 40 thermal power projects, a move that is expected to save up to Rs 6,000 crore in logistics cost.

The proposal includes swapping agreements for power projects of companies including Adani Power, Indiabulls Power and NTPC, among others.

The Inter Ministerial Task Force (IMTF), which was formed to undertake a comprehensive review of existing coal sources and consider feasibility for rationalisation of linkages, has approved coal linkage rationalisation for 18-20 thermal power plants, according to sources.

IMTF comprises officials from the Ministries of Power, Coal, Railways and the Central Electricity Authority.

Sources said, consultancy firm KPMG has listed out 20 proposals for the coal swapping arrangements.

KPMG, in its report to the Ministry of Power, has stated that 20 proposals for the swapping arrangements are feasible.

The swapping arrangement between NTPC for its thermal power plant in Chhattisgarh with Gujarat State Electricity Corporation Limited (GSECL) are estimated to save about Rs 720 crore per year on the logistics front.

The report said, the western Maharashtra's plants which are closer to the ports can swap domestic linkages with imports of hinterland plants in eastern Maharashtra. It estimated possible logistic saving of Rs 303 crore annually.

KPMG also gave a list of possible swaps including Indiabulls plant and Sterlite Energy's project in the region.

Rajasthan Rajya Vidyut Utpadan Nigam Ltd (RRVUNL), which is nearly equidistant from both port and the Northern Coalfields Ltd (NCL) mines, can swap domestic linkages with imports of hinterland plants of NTPC.

Similarly, thermal power projects in Haryana, Uttar Pradesh and Punjab can benefit from the swapping pacts saving close to Rs 456 crore.

KPMG also suggested that the generating stations of Tamil Nadu Generation and Distribution Corporation (TANGEDCO) are closer to the coast and even domestic coal is taken by the sea route to these stations. These plants can increase the coal import quantities through port arrangements.

It added, NTPC can switch its coal imports with domestic linkages providing coal to TANGECO.

Sources said, approximately between Rs 4,500 crore to Rs 6,000 crore logistics cost can be saved through these proposals of coal linkage rationalization and swapping arrangements.