State PSUs ask CIL to go slow on supplies

KOLKATA: WhileNTPC has locked horns with Coal IndiaBSE 0.52 % (CIL) over the quality of coal and is refusing to pay the entire bill, state-owned power PSUs now have a problem of plenty.

Almost all state-owned power generators, including those from Gujarat, Rajasthan, Haryana, Madhya Pradesh, Uttar Pradesh and West Bengal, have either formally or informally asked CILBSE 0.52 % to go slow on coal supplies because coal stock position at their thermal power stations have touched alarmingly high levels. Stocks in these plants are good for 16 days on an average, while at some plants, it is as high as 35 days.

Large coal stock during summer spontaneously catches fire and any entity dealing with coal stock does not want large stocks at their yard because of this risk. CIL has been sending higher quantities of coal since December 2012, but the problem started with the onset of summer when coal started to catch fire.

In a letter to Coal India, Bengal's power PSU has informed that coal stocks have reached dangerously high levels and spontaneous fires have broken out at several places, jeopardizing safe operations of the plants. The generator has requested CIL to reduce supplies by at least 15%.

"Some states have asked us informally to reduce the number of rakes being sent to them. They said that they are burdened with excess coal for the last six months because CIL has been dispatching more than the agreed quantities to them," said CIL chairman S Narsing Rao.

According to CIL officials, various thermal power stations of the Bengal power generators have stocks varying from 14 to 35 days for all plants, and there are worries about a large portion of this stock catching fire.

"Although state power PSUs from Haryana, Gujarat and Rajasthan have been requesting us to reduce supplies, they have not sent any formal letters because they may have to pay penalty if they do not lift the entire amount of coal and they may also come under pressure from the railways for not using the number of rakes allotted to them," a senior CIL official said, who didn't want to be identified.

"Almost all of them have asked us to reduce stocks by 10% to 20%. In fact, the total stock in power plants has reached 20 million tonnes of which 0.8 million tonnes is imported and the rest has been supplied by CIL. Except for some logistics problems in some mines, coal stocks in almost all power stations are more than adequate," said Rao.

"However, some 14-15 units have problems which are basically due to logistics issues. However, I promise 100% coal availability of utilities that have purchase agreement with power distribution companies. If there are any distribution issues, this needs to be sorted out together with the railways," said Rao.