Coal India Limited Cancels Supply Deals with Power Companies

CIL Cancels Supply Deals with Power Cos

Coal India, or CIL, has cancelled preliminary supply pacts with as many as 60 captive power plants and independent producers, including the Tatas, the Essars and the Bhushans, saying they did not comply with the stipulated norms.

“Authorisation of LoAs (letter of assurances) have been cancelled/ withdrawn for non-submission of CG (commitment guarantee) within the stipulated period,” CIL has said in a notice. CG is an amount, equivalent to 10% of the notified price of the annual coal requirement of the power firms, which the power companies have to deposit with the coal firms.

The two power utilities whose authorisation of LoAs have been cancelled are Tata Power’s 120-mw Unit V at Jojobera, Jharkhand, and Durgapur Project’s 300-mw unit — 7A at Burdwan in West Bengal where coal was to be supplied by CIL subsidiaries Mahanadi Coalfields and Eastern Coalfields, respectively.

As per the notice, 60 CPPs whose assurances have been withdrawn include units of Bokaro Power Supply, a JV of SAIL and DVC, Bhushan Power and Steel, Essar Power, Grasim Industries, JSW Aluminium, JK Tyre and Maharashtra Energy Development Agency.

Source: ET