Ministry rejects coal linkage for PPP projects, TNPGCL to take up Ennore thermal plant expansion
Earlier, the corporation had terminated the engineering procurement contract (EPC) for a second time due to slow progress and poor performance, and appointed a consultant to prepare a detailed feasibility report to undertake the project under the PPP mode;
CHENNAI: Facing constraints in coal linkage that has created hurdles for the 660 MW Ennore Thermal Power Station expansion project planned under public-private partnership mode, the Tamil Nadu Power Generation Corporation Ltd (TNPGCL) is mulling taking it up on its own or through joint venture.
Earlier, the corporation had terminated the engineering procurement contract (EPC) for a second time due to slow progress and poor performance, and appointed a consultant to prepare a detailed feasibility report to undertake the project under the PPP mode.
As per the minutes of the 54th meeting of the Southern Regional Power Committee (SRPC), the Union Coal Ministry has clarified that coal linkage would not be allotted to PPP projects or those implemented by private companies, but only to projects executed by central government entity, state utility, or a joint venture of such entities.
“In light of this, deliberations are ongoing regarding whether the upcoming project will be taken up by TNPGCL directly or under a joint venture structure. The matter is still under consideration, and the feasibility report is awaited,” the minute said.
Sources said domestic coal linkage is essential to keep energy generation cost low. “Without that, the cost of generation will shoot up with imported coal,” sources said, adding that the final decision would be taken soon.
The ETPS Expansion project, which began in July 2014, has been facing delays. First, the EPC contract with Lanco Infra Tech was terminated in April 2018 after the company declared bankruptcy. The firm was awarded the contract in May 2014, but it executed only 18 per cent of the works, incurring an expenditure of Rs 712.26 crore.
After that, the erstwhile Tangedco floated a fresh tender and awarded the contract for remaining works to BGRESL in March 2019. But it failed to submit the performance banking guarantee on time, resulting in the withdrawal of the contract in April 2021. However, Tangedco reinstated it as the EPC contractor in November 2021 after the current regime came to power.
But the firm executed only 0.56 per cent of physical works and spent Rs 16 crore by February 2024, leading to the termination of contract.