In an attempt to discipline power producers, the Indian coal ministry has cancelled fuel linkages to three power projects – the Daewoo-promoted 1070 MW Korba (East) project in Chattisgarh, the 700 MW Yamuna Nagar Thermal power station being built by Haryana Vidyut Prasaran Nigam and the 800 MW Jawaharpur project.The ministry has cancelled these linkages because Coal India “cannot afford to make financial commitment to these projects at a time when their backers are not in a position to ensure offtake of coal” according to official sources.
The ministry has been trying to convert these fuel supply arrangements into legally binding agreements. As a first step, it has been asking producers to pay an amount equivalent to one month’s coal offtake as an earnest, and two months’ offtake as a gesture of commitment .
