Millennium Post

Import orders for power plants continue to burden Coal India

"During 2014-15, CIL has received a firm order for import supply to the tune of approximately 5 lakh tonnes. The supply is expected to be completed in the third and fourth quarters of the current fiscal," Coal and Power Minister Piyush Goyal said in a written reply to Lok Sabha.

The minister had in November said that India should not remain an importer of thermal coal for power plants but on the contrary should be in a position to supply to the world. Goyal told the House that CIL has put in place a modality for importing coal through a PSU supply agency to the willing power plants. "Under the provisions of new Fuel Supply Agreements, in accordance with the Presidential Directives issued to CIL, option is also given to Power Utility sector consumers to opt for supply of a part of the Annual Contracted Quantity (ACQ) from imported coal through CIL...", the minister said.

In the annual plan for the ongoing fiscal, Goyal said, the country's demand for coal for power utility sector has been assessed at 551.60 MT (million tonnes) against which supply of 466.89 MT has been planned from indigenous sources, leaving a gap of 84.71 MT which is envisaged to be met through coal imports.

Meanwhile, to improve fuel supplies to power plants, government is working on swapping arrangement of coal which will help save Rs 6,000 crore, government informed Lok Sabha.

Coal and Power Minister Piyush Goyal informed Lok Sabha that coal production has significantly increased in the last few months. Replying to questions, he said government was working on an arrangement under which coal blocks will supply fuel to the nearest power plants, under a swapping arrangement to rationalise coal linkages.

He explained that since coal blocks mostly have arrangements with power plants located far off, it leads to heavy expenses on carriage. This will be addressed through the swapping arrangements between coal blocks.

Citing an example, he said recently NTPC and Gujarat State Electricity Corp entered into a pact for swapping one million tonnes of coal, which is expected to save over Rs 300 crore for the state government.This experiment will then be expanded to other states, he said, adding it will help save Rs 6,000 crore and benefit consumers. Separately, he said that as many as 11 public sector banks have more than Rs 51,000 crore worth exposure to various coal linkages.

Quoting information received from the Department of Financial Services, Goyal said, “11 banks have exposure to the tune of Rs 51,203.96 crore against coal linkages, 10 banks have no exposure, whereas six banks have not given information.” The minister was replying to a query on whether public sector banks grant credit against coal linkages and their details.

Goyal said the new long term coal linkages or Letter of Assurances have not been granted to any sector since 2010 due to low coal production. According to him, availability of fuel was not sufficient to cater to requirements of linkages granted to all power projects.

“The growth in production of coal in India was only 0.2 per cent in 2010-11 and 1.3 per cent in 2011-12 as against 6.1 per cent in 2007-08, 7.8 per cent in 2008-09 and 8 per cent in 2009-10. Hence, the production of coal in the country was not commensurate with the projections of its availability,” he said. Goyal said there were well established procedures for providing coal linkages.

Recently, a case came to government’s attention where the shareholding of the company was changed after it received permission for coal linkage. Subsequently, the government has denied the permission to that entity, he said. He, however, did not give specific details. Responding to another query, Goyal said the larger focus is on providing coal linkages to independent power projects where the electricity tariffs are regulated. 

Deloitte yet to submit final report on CIL restructuring: Goyal

Consultancy firm Deloitte which was selected to institute a study on restructuring options for state-owned Coal India is yet to submit its final report, Parliament was informed on Thursday.
“Ministry of Coal has instituted a study on restructuring options for Coal India Ltd (CIL) by engaging Deloitte Touche Tohmatsu India Pvt Ltd ... The consultant has not submitted the final report after taking into consideration the concerns expressed by the coal companies on the interim report,” Coal and Power Minister Piyush Goyal said in a written reply to the Lok Sabha.

The consultant had submitted its interim report in October which was discussed with coal companies and CIL, the minister said. In the interim report, the consultant had broadly suggested three restructuring options, including reforming holding company and subsidiaries through internal changes in structure, systems and roles and creating independent mega regional companies, Goyal said.

Goyal added that the consultancy firm had also suggested phased creation of independent entities with continuation of holding company during transition.

In the same Interim report, he said, Deloitte had also suggested restructuring model of Central Mine Planning and Design Institute Ltd (CMPDIL), a subsidiary of CIL with the options like “CMPDI as an autonomous body under MoC (Ministry of Coal).
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