Govt asks state gencos to stop imports, buy coal from CIL.

Concerned over no takers for the coal produced by Coal India (CIL), the Centre today asked state-owned power generation firms to immediately stop imports of the fuel and instead buy coal from the company.

“We have coal but there aren’t many takers for it. It is in this context that let me request the delegates from the states which are currently importing coal should immediately stop the imports because Coal India will offer coal to them,”

Union Coal Secretary Anil Swarup said during the inauguration of a two-day conference on power here.

He said all the states, specially the generation companies, can work out a strategy to see how they can totally eliminate import of coal for the purpose of power generation.

“We have a very ambitious target of about a billion tonne of coal production by Coal India by 2020. But the problem is that if we are not going to pick up the coal which we are producing now (which is 550 million tonne) then what we will do with the one billion tonne of coal that we are coming up with,” he said.

Therefore, it is necessary to plan for realistic requirement of coal in coming few years, Swarup said.
Coal India has set up a whole set of process for auctioning the coal for private companies and as much as 8 million tonne will be offered every month to regulated power sector or to be picked up by private sector.

“As far as state gencos are concerned, we are open for discussion, you (gencos) give a number and we will provide you the coal that you want,” he added.

Swarup also appealed to the states to commence work on the coal blocks allotted to them.

“We have taken pride in coal block allocation or coal block auction. But the problem is that some of the coal blocks allocated to some of the state governments have not started producing coal.

“This is serious in terms of loss of revenue to the state government. The more you mine from there the more benefit would be accrued to the state. Centre does not gain much out of it,” he said.

Swarup also said that the dues to be paid to Coal India have gone up significantly which might result into pushing the company into red.

“Dues to be paid to Coal India have gone up significantly. Last year it was around Rs 1,200 crore. We need to look into it and start paying. I don’t want it to becomes a sick company on account of non-payment. I have been getting calls from chief secretaries to continue supply of coal despite non payments. We don’t intend stop supply of coal,” he added.

Swarup further said the Centre has taken the decision to rationalise the linkages to cut down on the transportation cost of the coal.

“On the one hand we are trying to rationalise coal linkages to save cost on transporation..We can also divert coal of inefficient plant to efficient one. But this requires a lot of planning and details,” he said.

The Secretary further said that the introduction of the dispute resolution mechanism in the sector has been paying excellent results.

“We have also put in place a dispute resolution mechanism. This (dispute mechanism) has already started functioning and we have managed to settle a large number of cases. I believe all such disputes between Centre and states relating to coal should be settled through this mechanism,” he added.

Referring to the complaints of bad quality of product from Coal India, Swarup said, “the company has put in place the regime wherein it has been their endeavour to ensure that good quality coal is made available. At least the quality of coal that is professed to be given is given to state gencos.”

Source : financialexpress.com