Nod to coal supply on 'tapering basis'

The government has approved the allocation of coal on "tapering basis" to power companies who have been allocated coal blocks for their power plants but mining of the blocks is yet to start.

Aimed at addressing the mismatch between production from the mine and commencement of the power plant, the new policy has been implemented with effect from December 4.

Usually it takes about 48 months to build a power plant, but the development of a mine takes about seven years. In such a scenario, the power plant needs coal supply to fire the plant and produce power. The standing linkage committee (long-term) would consider the tapering linkages issue. "It is a positive step," said an industry expert, as it would help power plants become operational on time.

The policy has been backed by the Planning Commission and was recently approved by the energy co-ordination committee headed by the prime minister.

The procedures for granting tapering linkages would be similar to the procedure being followed for grant of normal linkages, which includes submitting the application form with prescribed processing fees. This would followed by reports from ministries concerned and companies, quite similar to the normal procedure for the linkage followed by the coal ministry.

Year-wise allocation of coal on tapering linkages would be based on the difference between year-wise requirement and the year-wise production of coal as per the approved mine plan.

Tapering linkages usually would get terminated with the opening of the mines.

Normally, the validity period for tapering linkages would not be extended.

However, in some rare cases it could be reconsidered, according to the guidelines.