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Three IPPs finalise fuel supply agreements with Indian Oil
OUR CORPORATE BUREAU
MUMBAI, Dec 29: Three independent power producers, with an aggregate projected output of over 2,000 mw, have concluded fuel supply agreements with Indian Oil Corporation on Monday.Even as a number of IPPs around the country languish for want of proper fuel supply agreements (FSAs), the Indian Oil committed itself to supply a total of 700,000 metric tonnes per annum worth of fuel to the three power projects on Monday.The company signed an agreement with the STI Power India Ltd, which is putting up a 347mw power plant at Guna In Madhya Pradesh. As per the agreement, the company will meet their fuel requirements of 433.75 tmtpa of naphtha. This project is likely to be commissioned in the second quarter of the year 2000. An agreement was also signed with STI Ltd for the fuel supply of 33.25 tmtpa of furnace oil for their 25mw power plant, which is coming up at Dewas, Madhya Pradesh.Another agreement concretised was with the Madhya Bharat Energy Corporation Ltd, which is setting up a 1,712mw power plant at
Khandwa. The company will meet their fuel requirements of 213.75 tmtpa of naphtha.Promoters of this project includes Japanese major Marubeni Corporation, the seventh largest corporation as per the Fortune 500 listing. Fuel supply agreements have held up a number of independent power producers from going through with their projects. One of the major problems is that the rates being offered by Coal India Ltd have proved more expensive than the rates quoted for imported coal, so that coal-fired power plants have found it difficult to conclude satisfactory FSAs.In fact, the other problem that has surfaced is that CIL has not been able to guarantee the quality of coking coal required for coal-based power plants to the extent required. Another crucial factor in the fuel supply agreements is ensuring the delivery of the fuel, which, in cases of coal has to be done through the Indian Railways. Due to paucity of infrastructure, the railways have been unable to guarantee proper and timely delivery of fuel to the
projects.
Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.
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