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Power majors call meet today to discuss fuel-supply pact deadline
Anupma Airy
NEW DELHI, December 28: Leading power companies, including Reliance Power, Wartsila NSD India Limited, Noida Power, DLF Power, RPG Power and others, are meeting on Monday to deliberate upon a host of important issues relating to the signing of the fuel-supply agreement (FSA).According to a leading power producer, all these companies, along with many other independent power producers (IPPs), will meet under the aegis of the Confederation of Indian Industry (CII). CII, as per the source, has decided to form a core group on liquid fuels which will identify the impedements/bottlenecks faced by the power industry and suggest solutions. CII officials confirmed the constitution of the core group and added that with the government setting deadlines for the IPPs to sign FSA, by January 15, 1998, with the oil PSUs or else declare their alternate sources of fuel supply, the CII core group will prepare a status note on the liquid fuel highlighting quantity, quality and availability of the fuel. The core group will
also deliberate on the need for having a long-term policy for such fuels for power generation, sources added. Attendance from the government side in the meeting will include officials from the Ministry of Power, Oil Coordination Committee (OCC), Indian Oil Corporation (IOC), ministry of petroleum and natural gas and Rajasthan State Electricity Board (RSEB). It may be noted here that many issues relating to the commitment charges, fuel transportation charges, linkage quantities, infrastructural development fee as a whole amongst others in the FSA, as laid down by the government, are still unacceptabe to the IPPs, who have now started looking towards the private fuel managers for managing their fuel supplies. A host of leading private petroleum companies who are willing to take on the responsibility of a turnkey supplier of fuel. These companies includes names like Reliance Power, Enron International, Indian Oil Tanking, Dodsal Ltd, British Gas, Maersk India, SK Oil company and Caltex
Petroleum. However, the government's move to allow IPPs to choose fuel managers is also not clear. The power producers will deliberate in detail on this issue in the forthcoming meeting on Monday. On being contacted, the officials in the power ministry said that all private sector power producers, who were given fuel linkages to set up 12,000 MW projects, should gear up and sign the FSA's by the fixed deadline or intimate the ministry of their alternate arrangements. Moreover, it is also reported that the liquid fuel linkages given to IPPs will be cancelled if they do not achieve financial closure by March, 31, 1998. The private power producers, have decided to take this up with the government, to extend this date as they feel that it is just impossible for them to achieve financial closure by this date, as the financial institutions are not ready to fund these projects with the given terms and conditions in the FSA. Meeting after meeting, deliberations and discussions seems to be the fate of the
liquid fuel projects. These projects which were initially termed as the `short gestation projects' have already lost their meaning and it is estimated by power industry experts, not more than 5000 mw liquid fuel based power projects are likely to come up.
Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.
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