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Our Bureau

Kolkata, Aug. 6 There seems to be no end to the confusion and controversy over the real reasons behind the coal shortage at large number of power plants across the country.

While arguments galore criticising the role of Coal India Ltd – catering to 80 per cent of country’s coal requirement – (and railways) in creating the crisis, the Indian coal major on the other hand blames the power sector for practically inviting the trouble.

According to Mr Partha S Bhattacharyya, Chairman of CIL, while the coal major has supplied 95 per cent of the promised quantities during the first four months, it is lower imports than promised by the power sector in the annual action plan, prepared by both the ministries, has made all the difference.

“During the first four months CIL has supplied 95 per cent of the targeted 22.5 million tonnes to power sector during the first four months. On the other hand, power sector imported only 2.5 million tonne coal, 56 per cent less than the targeted 5.7 million tonnes during the period,” he said.

According to CIL, considering that the heat value of imported coal is generally one and a half times of the Indian thermal coal, the real impact of the shortfall is higher than perceived.

The root cause, CIL sources suggest, may be over dependence of power sector on short-term domestic coal linkages due to zooming global prices vis-À-vis low cost of coal in the regulated Indian market. Short-term (or spot) supplies are made by CIL on availability basis and without any contractual obligation.

Thermal coal is currently available (spot) in the global market at $130-140 a tonne, almost double than the corresponding period last year. In comparison, the best quality thermal coal sold by CIL is priced between $25-50 a tonne at the prevailing exchange rate.

Interestingly, there seems to be tougher time ahead for the power sector. According to Mr Bhattacharyya, even if the imports are stepped up in the remaining part of the year, lower availability of wagons post monsoon may pose further hurdles.

More Stories on : Coal | Power

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