Comments
The Union Government may ask Coal India Ltd to import 45 million tonnes (mt) of thermal coal in 2012-13 to meet the projected demand of 393 mt from the power sector during the year. The proposal was mooted by the Planning Commission and is currently under the Coal Ministry's consideration.
According to sources, the Plan panel suggested that the imported coal be supplied using a ‘pooled price mechanism', under which the customers of domestic coal may have to pay a slightly higher price to partially subsidise the cost of imported coal.
The Coal Ministry is expected to take a call on the proposal this month.
Responding to the proposal, CIL has sought the Coal Ministry's permission to award the contracts to public sector trading houses such as MMTC India Ltd or State Trading Corporation (STC) which in turn should be responsible for imports and delivery of coal to the customer.
Political hurdles
Sources suggest that the proposed pooled price mechanism may face stiff opposition from old projects — mostly controlled by Central and State governments — largely linked to domestic supplies for generation. A rough estimate suggests that nearly 98 per cent of the fuel supply pacts signed till early 2009 are run by State or Central public sector undertakings.
On the other hand, nearly half of the capacities that came on stream in the last two years are controlled by the private sector.
This ratio is expected to tilt further in favour of the private sector in the next couple of years.
In other words, the pooled price of coal may step up the cost of generation of old State utilities while benefiting new capacities, half of which are owned by the private sector.
Tight rope walk
Meanwhile, CIL has been asked to step up its supplies to the power sector by 35 mt, or 11 per cent, to 347 mt during the year. The coal major supplied 312 mt of coal to the power sector in 2011-12.
“The target for incremental supplies to the power sector during the year is 2.5 times the total incremental supplies by the company during the last three years,” a source added.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.