Financial Daily from THE HINDU group of publications
Monday, Jul 01, 2002
Industry & Economy
Logistics - Shipping
Columns - On the move
Coal linkages raise port temperatures
THE THERMAL coal linkages for coastal shipments through Paradip and Haldia ports for the July-September quarter have been slashed while that for Visakhapatnam port for has been kept unchanged vis-a-vis the April-June quarter.
The Coal Linkage Committee, at its meeting in Delhi recently, decided on a linkage of 6.35 lakh tonnes a month for the July-September quarter for Paradip against the linkage of 6.65 lakh tonnes a month in the April-June quarter. Initially, the linkage was slashed to 5.35 lakh tonnes, but subsequently raised by one lakh tonnes at the insistence of the representatives of the Tamil Nadu Electricity Board (TNEB) and the Paradip Port Trust.
The TNEB, having acquired several colliers on charter, would, it was pointed out, be hit by the under-utilisation of the vessel capacity in case there were cutbacks in linkages, particularly at Paradip. The PPT argument was that thermal coal traffic being the lifeline for the port any cutback in the linkages would deal a severe blow to its earning.
For Haldia, the cutback has been much higher at 3.05 lakh tonnes a month for July-September quarter from more than four lakh tonnes of month in the previous quarter. However, for Visakhapatnam port, the linkage has been fixed at 2.3 lakh tonnes a month for the July-September quarter, the same as in the April-June quarter.
Several reasons are believed to be responsible for the slashing of the linkages. First, many power generating plants in the South, dependent on coastal shipment of thermal coal through these three ports, are believed to be holding sufficient stocks, equivalent of 32 to 38 days' requirements. So there is no need for stepping up allocations under the linkage.
Next, Paradip port, which has the capacity to handle as much as 20 million tonnes of coal a year thanks to the huge mechanised coal handling facility installed there, is believed to be suffering because of the Railway's infrastructural constraints. The Railways is reluctant to move additional coal rakes to the port from the Ib Valley.
Finally, the Environment Ministry has stipulated that no thermal power station in the country should use thermal coal having ash content in excess of 34 per cent. Some of the Orissa coal shipped through Paradip are believed to have more than 34 per cent ash content.
Haldia, which mainly handles high-grade coal of Eastern Coalfields Limited, faces the problem of inadequate supplies from the collieries, for a variety of reasons. As a result, the dock has not been able to handle even the volumes as per the linkage fixed for the April-June quarter.
Paradip and Haldia port authorities are upset at the allocations having been made to Visakhapatnam. Perhaps rightly so. It was decided earlier that the thermal coal shipments for the TNEB through Visakhapatnam port would be gradually phased out to ensure fuller utilisation of the Paradip facility. However, that has not been happening. For two reasons. First, the Railways, it is learnt, is opposed to suspension of thermal coal shipments through Visakhapatnam port. This is because the Railways gets enough coking coal cargo on the return journey. The same wagons which carry thermal coal to Visakhapatnam port for coastal shipments for TNEB on their return journey load imported coking coal for the steel plants. Vizag port is gateway port for Steel Authority of India Ltd.
Mahanadi Coalfield Limited (MCL) also is opposed to suspension of thermal coal shipments through Visakhapatnam port. The bulk of MCL's Ib Valley coal is routed through Vizag. The Ib Valley coal has very high ash content, much higher than the stipulated norm. Once the shipment of this coal is suspended, MCL, it felt, may find it hard to locate new buyers. The TNEB blends Ib Valley coal with high grade Raneegunge coal before using in the thermal plants.
The PPT is upset at the slashing of the linkage. At a time when it is desperately trying to step up the throughput of the mechanised coal handling plant built at a huge investment, the cutback in the allocation will certainly hit the plant's viability. The complaint of "railway infrastructure constraints", the PPT sources observe, "is more of a mental block". With Talcher-Sambalpur section having been opened for traffic, the complaint of `constraints' is a figment of imagination, it is pointed out.
Haldia dock sources are reluctant to attach much importance to the allocations made at the linkage meeting. It has often been found that the decisions taken at linkage meeting being reversed subsequently. For the April-June quarter for example, initially a linkage of 3.25 lakh tonnes a month was decided for the dock; only to be revised upwards subsequently to more than four lakh tonnes. The monthly linkage for July-September quarter has been set at around three lakh tonnes but the availability of coal leaves much to be desired. For a variety of reasons, coal from Raneegunge and Jharia coalfields under ECL are not arriving, with the result not even three rakes are arriving a day. At this rate, the allocation under the linkage has little relevance, it is felt.
The goings-on in the coastal shipment of thermal coal, according to many, is nothing but a smokescreen. They apprehend that something very drastic. Instead of importing coal by way of coastal movement, the TNEB might really opt for full- scale import on the ground of low ash content and high calorific value, more so in the changed political scenario in the state. The fear may not be totally unfounded if past experience is any indication.
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