Marwa power plant gets out-of-the-way coal supplies, hurts private producers

Discriminatory supply of coal to the Chhattisgarh State Power Generation Company-run Marwa thermal plant by Coal India's South Eastern Coalfields Ltd (SECL), is hurting the sector, as private power producers with long-term fuel supply agreement grapple with dry fuel shortage.

Association of Power Producers (APP), an independent power producers' association, has raised alarm on SECL giving preferential treatment to Marwa Thermal Power Plant, flouting the government policy. Despite no extension confirmation to the Marwa thermal plant after the Memorandum of Understanding (MoU) ended on September 13 under the 'Bridge Linkage' policy, SECL has supplied 20 coal rakes of about 80,000 tons.

 

The Coal India subsidiary, however, has been unable to meet commitments signed with other generation stations, while it provides preferential fuel supply to the state-run plant, a letter expressing concern by APP to the government has said. This comes at a time when domestic coal supply has failed to keep pace with consumption in recent months.

The worsening coal crisis in recent months has forced power companies to increase fuel imports. In such a scenario, preferential coal supplies to Marwa power project and failing on assurances given to other long-term linkage holders rings hollow.

Referring to the diversion of coal to Marwa Power Project at the cost of interests of independent power producers, APP Assistant Director General Girish Deveshwar wrote, "Such an action by the coal companies is not desirable, especially when SECL is reportedly facing coal shortages and is consistently struggling to meet commitments of supply of coal to existing FSA holders. In this context, it is requested that necessary directions may be issued for restrictions of coal supplies to Marwa TPP, in view Non-extension of coal supplies under Bridge Linkage MoU of Marwa TPP."

In February 2016, the Ministry of Coal had issued a guideline on short-term linkages or 'bridge linkage', which would fill gap of coal requirements for both power and non-power public sector units, until the allotted coal mine start production. The policy, a short-term measure, would provide a temporary arrangement for three years from the date of allocation of coal blocks.

APP has stated that SECL continues to provide coal to Marwa power project without accepting the supply extension request of 2019, while it has failed to meet commitments made to the long-term linkage-holders.