Though both the units of Essar Power’s 2X600 MW Mahan Power Plant were commissioned more than a year ago, the plant is suffering for want of regular coal supply. The power plant was commissioned in March 2013 but is lying idle for want of coal. The power project set up at an estimated cost of Rs.7,299 crore (out of which Rs.4345 crore is financed through debts) was to get coal from Mahan coal block in Singrauli. However, coal production has not yet started at Mahan coal block as Madhya Pradesh government has not yet given mining lease for the said project. Essar Power has already signed long term PPAs with discoms for 240 MW that needs to be honored soon and additional PPAs for the power project are also pending due to non-confirmation of coal supply.
Even if the mining lease for Mahan block is issued now, coal production from the mine may take another 18 to 24 months to start. Due to this reason, Essar Power is now looking for tapering coal linkage for the plant as an interim measure to start production from the plant. However, coal ministry, despite the recommendation from power ministry has not yet acted upon tapering coal linkage request.