India: Rlys, Reliances power co sign coal-supply pact

India: Rlys, Reliances power co sign coal-supply pact

In another move on the Public Private Partnership (PPP) front, railways on Tuesday signed an agreement with Reliance Energy Group’s Rosa Power Supply Company Ltd to transport coal.

According to the agreement, railways will supply about 3 million tons of coal a year to Rosa. The company, in turn, will generate demand for the coal supply. The agreement includes punitive measures for both parties if they do not fulfil their respective commitments. The railways will transport coal from Central Coalfields Ltd’s mines to Rosa Thermal Power Station in Uttar Pradesh.

This is the first agreement between railways and any private entity for transportation of coal, Railway Board chairman J P Batra said. He said such agreements would become the norm in future as more Independent Power Producers (IPP) enter the power generation sector.

Rosa will build, own and operate the 600 MW coal-fired power station at Rosa in Saharanpur district of UP. The railways will get committed coal traffic of 2.7 million tonnes per annum from Rosa for a period of 25 years, Batra said.

The agreement entails obligations on the part of both parties as also a provision for fine on the party which fails to fulfil any obligation. If railways fulfil the agreement, the company will pay 5% bonus to it. “If it fails to transport at least 1.9 million tons, it will have to pay a 5% penalty.

Batra was confident that railways would be successful in the venture since it had already transported over 6,000 wagons per day more than last year.


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