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Coal poser on power funds

Patna, Oct. 13: The absence of long-term coal linkage is preventing Bihar State Electricity Board from availing a Rs 200-crore loan sanctioned by Central Bank of India for its Barauni thermal plant.

“We had a month ago sanctioned Rs 200 crore for the state electricity board’s proposal to set up two power plants at Barauni as part of its expansion plan. The amount is ready and will be disbursed once a long-term coal linkage agreement is submitted to us. We are awaiting the board’s reply,” the bank’s executive director, V.R. Aiyer, said.

Reminded of the tapering coal linkage the board got from the coal ministry for setting up power plants at Barauni, Aiyer said: “We want a long-term coal linkage for 10 or more years. We don’t have any idea about tapering coal linkage. If the board fulfils our terms and conditions, then the bank would consider increasing the loan amount by another Rs 200 crore.”

Tapering coal linkage means that Barauni thermal power plant would get coal supply for a limited period, mat be for two-three years, till Urma Pahari coal block, jointly allocated to Bihar and Jharkhand, is developed. Once coal supply starts from the Urma Pahari block, the tapering coal linkage would be withdrawn.

Bihar State Electricity Board (BSEB) chairman P.K. Rai said: “We have asked the bank to relax norms to give the loan, as the Power Finance Corporation has also agreed to relax norms for granting loan on the basis of tapering coal linkage. The coal controller has quantified the requirement for the plant and written to the (coal) ministry. We are now waiting for issuance of letter of assurance within a week.”

BSEB plans to set up two units of 250MW each under its expansion plan at Barauni to meet the energy requirements of the power-starved state.

The BSEB got tapering coal linkage for Barauni’s expansion plant in August following chief minister Nitish Kumar’s attempt. The coal ministry had earlier rejected Bihar’s plea for coal linkage, but later agreed to provide tapering coal linkage after Nitish managed to secure Prime Minister Manmohan Singh’s intervention into the issue.

The plant is crucial for the NDA government in the state because Nitish has vowed to provide power to all by the end of 2015, failing which he would not seek votes from the electorate.