OASME seeks help from Chief Minister, Naveen Patnaik to avert the impending coal crisis

BL Kolkata Bureau | | Updated on: Jan 18, 2022
Odisha holds 25 per cent of the country’s total coal deposit.

Odisha holds 25 per cent of the country’s total coal deposit. | Photo Credit: Mohammed Rayaan _11487@Chennai

The coal shortage has been threatening the viability of small industries, says OASME

Odisha Assembly of Small and Medium Enterprises (OASME) has sought for the support of Chief Minister Naveen Patnaik to ensure coal supplies to avert the closure of MSME units in the State. The ongoing coal crisis has been affecting the survival of the local industries, OASME said in a letter to the Chief Minister requesting for his intervention in averting the impending crisis within the state and helping sustain industry operations.

The shortage, which is a result of the intermittent coal supplies to captive power plants (CPPs)-based industries in Odisha, has been threatening the viability of industries that form the backbone of the State’s MSMEs and provide employment to lakhs of people.

“Despite the untiring efforts of the government to support the industry, the continuing coal shortage due to stoppage/curtailment of coal supplies and rakes has threatened the very survival of local industries with the risk of loss of lakhs of livelihood and closure of thousands of MSMEs in the State,” Satwik Swain, Secretary General, OASME, said in the letter.

Also read: India’s coal-fired power plants face prospect of stranded asset risk: IEEFA report

The letter further highlights that despite the continuous efforts of the State government towards industrial development, the CPP-based industries in Odisha who are heavily dependent on coal as their primary raw material are unable to run smoothly due to the current situation. The letter further brings to attention that since August 2021, the CPPs are getting just 40-50 per cent of the required coal supplies, creating a backlog of over 1,500 coal rakes, since most of the available coal rakes are being diverted away from CPPs.

“This struggle to receive uninterrupted coal supplies for continued operations has brought down the industry to a standstill and left with no time to devise any mitigation plan to continue sustainable operations. Due to the aforesaid reason, the operational power plants are forced to operate at reduced power generation levels, creating a huge risk of closure of the plant,” the letter said.

Odisha’s coal deposit

It is to be noted that Odisha holds 25 per cent of the country’s total coal deposit. Out of the 150 million tonnes of coal produced through Mahanadi Coalfields Ltd, nearly 65 per cent is being transferred to other states and only 35 per cent is reserved for local industries, against the actual minimum requirement of 55 per cent for local CPPs.

“Such acute shortage is creating a dangerous situation for the manufacturing sector, threatening the shutdown of MSMEs, leaving the State deprived of domestic value addition along and a bad impact on the global investment,” he said.

Published on January 18, 2022
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