Cabinet approves GoM's recommendations on stressed power plants

New Delhi: The Union Cabinet Thursday approved recommendations of a group of ministers (GoM)  relating to issues of Stressed Thermal Power Projects including grant of coal linkage for short-term power purchase agreements (PPAs).

Briefing reporters, Finance Minister Arun Jaitley said the recommendations approved include grant of coal linkage for short-term PPAs, allowing existing coal linkage to be used in case of termination of PPAs due to payment default by distribution companies and procurement of bulk power by a modal agency against pre-declared linkages.

Central/state generation companies may act as aggregator of power.

The Government of India constituted a High Level Empowered Committee (HLEC) under the Chairmanship of Cabinet Secretary to address the issues of stressed thermal power projects. The committee made its recommendations to resolve the stress in thermal power sector and submitted its report in November 18.

The Government thereafter constituted a Group of Ministers (GoM) to examine the specific recommendations of HLEC and forward its comments for consideration of the Cabinet. Subsequently GoM recommended majority of HLEC recommendations.