Coal India Limited (CIL) is ready to identify surplus coal found in the captive blocks given to IPPs and fix prices at which the private parties will be allowed to sell coal to different power stations of the country.
This will primarily be effective for the 9 ultra mega power plants (UMPPs) coming up in the country.
The facility will be provided to IPPs who have got projects through tariff-based biddings.
An instruction on these lines will shortly be issued by the Centre where IPPs will be given the liberty to sell surplus coal found in respective captive coal blocks to other power stations.
CIL, however, will identify the surplus amount and fix prices for sale. Reliance Infrastructure (earlier Reliance Power) had made a request to the government for selling its surplus coal in the Sasan UMPP to its proposed 4000 Mws plant at Chitrangi in Madhya Pradesh.
It was subsequently approved by the empowered group of ministers (EGoM) but had to be stashed away on opposition from the Left parties, who felt such a system would contravene the existing basic regulations on selling coal.
CIL feels that this will augment the supply and distribution of coal across the country in future bringing in much relief for the public sector coal behemoth.
“If the government wants us to identify surplus coal and fix prices on it, we are ready for it. We have the necessary infrastructure and strength to carry out the job”, said CIL chairman Partha S Bhattacharya, who is already aware of the move being initiated by the Centre.
Some CIL officials, however, keep their fingers crossed on such a move even as the chairman may sound optimistic.
According to them, such a possibility is remote as till now there has been no updates on captive coal blocks provided to different IPPs.
One official requesting anonymity said, “In the past couple of years, over 170 captive coal blocks have been allotted to different parties, but not one has returned with feedbacks on its prospects. We have gathered in most cases they have not even started mining”.
The existing regulation says surplus coal will always become a property of the government and CIL will have to right to sell or store it as per requirements.
Coal industry analysts feel that the system could be regarded as a genuine de-regulation move in the sector, as private bodies will be given the right to trade in coal, which is currently under the aegis of CIL.
What concern CIL most is its current apprehension on not keeping up to commitments made to different power companies on supplies.
Presently 38 of the 73 power stations in the country are starved of coal and has been identified as ‘critical’.
So bad is the situation that some might even slip to the ‘super critical’ category with less than 4-days stock. During July 2008, CIL and Singareni Coal Company (SCCL)’s production slipped to around 30.02 million tonnes from the projected 32.44 million tonnes as pointed in the annual action plan (AAPs) monthly target.
Bhattacharya said, “This is quite logical as every year production during this month usually comes down due to rains and inclement weather. But we are almost 4.45 per cent more than what we achieved in July 2007.” During that time the production was 28.74 million tonnes.
Despatches to power sector during this period was 25.56 million tonnes. CIL has been insisting on the power companies to import coal to meet its requirement. Recently NTPC has announced an import of 8.2 million tonnes of coal.
The PSU coal giant has signed over 1000 FSAs and issued LoAs to power companies for supply of almost 700 million tonnes of coal while its production target during the 11th plan period stands at around 543 million tonnes.
This keeps avenues open for import of around 200 million tonnes of coal by CIL during 11th plan to meet domestic requirements at a current international price of Rs 18,000 crore.
