DVC buys costly foreign coal, shuns cheap local produce
31 Aug 2013 5:27 AM IST
When the current account deficit (CAD) is creating havoc in the economy, the Ministry of Power and its PSU, DVC, are showing more interest in coal imports than in using the domestic coal produced at its own mines. DVC Chairman R N Sen prefers imported coal which is priced at almost Rs 6,000 per tonne rather than using its own coal, which is priced around Rs 1,600 per tonne. This peculiar situation has attracted the attention of the CVC and CBI sleuths. According to them, it is a clear case of causing loss to the national exchequer.
Interestingly, DVC has four major coal mines allotted to it by the Coal Ministry. These are Saranpur Jamalpani, Gondulpara, Borjora (North) and Khagra Jaidev with combined reserves of around 600 million tonnes (mt). But instead of taking more initiatives to start coal production from these blocks, their hearts lie with coal imports. Borjora (North) has been developed by DVC Emta Coal Mines Pvt Ltd, which used to supply 7,000 tonnes of coal from that mine. They have been asked to reduce the amount to 2,500 tonnes.
Joint Secretary In-Charge (Power) ICP Kesri, too, is keeping mum on DVC’s preference for coal imports rather than its own coal. There are allegations of huge kickbacks changing hands in these deals.
The coal block is situated in the greenfield area and DVC Emta Coal has fought hard to overcome many hurdles in the way of its development. Moreover, the joint venture (JV) partner has invested heavily in the project to ensure that production as per the Approved Mining Plan (APM) is achieved as per schedule. In fact, the project is in a position to produce coal at the peak rated capacity of
3 mt per year.
Since the project has been sanctioned and developed for exclusive supply of coal to the Mejia TPS, it becomes the responsibility of the DVC to make all the necessary arrangements to receive coal as per the approved plan. The Barjora (North) Coal block is situated only 17 km away, almost at the doorstep of the Mejia TPS. As a result, the transport cost is negligible compared to coal from any other source.
The price of coal from this captive block is much lower than coal from any other source for the Mejia TPS. It is almost one third of any domestic supply price and one sixth of imported coal prices. In spite of this overwhelming advantage, it has been noticed that instead of giving preference to procuring coal from their captive coal block Borjora (North), they continue to source coal from other sources like ECL, BCCL, MCL and imports.
In July 2013, the Mejia TPS received 112, 50, 31 and 25 rakes from BCCL, MCL, ECL and imports respectively while only 180,000 tonnes was accepted from DVC Emta Coal Ltd. The Mejia TPS has to receive coal at the rate of 2,50,000 tonnes per month to comply with its obligation to receive the planned 3 mtpa.
DVC Emta Coal Ltd. has made large capital investments to build up its 3-mty mine capacity. It is imperative that the capacity is utilised to the full extent. Otherwise, DVC Emta Coal Ltd will suffer heavy losses.
Interestingly, DVC has four major coal mines allotted to it by the Coal Ministry. These are Saranpur Jamalpani, Gondulpara, Borjora (North) and Khagra Jaidev with combined reserves of around 600 million tonnes (mt). But instead of taking more initiatives to start coal production from these blocks, their hearts lie with coal imports. Borjora (North) has been developed by DVC Emta Coal Mines Pvt Ltd, which used to supply 7,000 tonnes of coal from that mine. They have been asked to reduce the amount to 2,500 tonnes.
Joint Secretary In-Charge (Power) ICP Kesri, too, is keeping mum on DVC’s preference for coal imports rather than its own coal. There are allegations of huge kickbacks changing hands in these deals.
The coal block is situated in the greenfield area and DVC Emta Coal has fought hard to overcome many hurdles in the way of its development. Moreover, the joint venture (JV) partner has invested heavily in the project to ensure that production as per the Approved Mining Plan (APM) is achieved as per schedule. In fact, the project is in a position to produce coal at the peak rated capacity of
3 mt per year.
Since the project has been sanctioned and developed for exclusive supply of coal to the Mejia TPS, it becomes the responsibility of the DVC to make all the necessary arrangements to receive coal as per the approved plan. The Barjora (North) Coal block is situated only 17 km away, almost at the doorstep of the Mejia TPS. As a result, the transport cost is negligible compared to coal from any other source.
The price of coal from this captive block is much lower than coal from any other source for the Mejia TPS. It is almost one third of any domestic supply price and one sixth of imported coal prices. In spite of this overwhelming advantage, it has been noticed that instead of giving preference to procuring coal from their captive coal block Borjora (North), they continue to source coal from other sources like ECL, BCCL, MCL and imports.
In July 2013, the Mejia TPS received 112, 50, 31 and 25 rakes from BCCL, MCL, ECL and imports respectively while only 180,000 tonnes was accepted from DVC Emta Coal Ltd. The Mejia TPS has to receive coal at the rate of 2,50,000 tonnes per month to comply with its obligation to receive the planned 3 mtpa.
DVC Emta Coal Ltd. has made large capital investments to build up its 3-mty mine capacity. It is imperative that the capacity is utilised to the full extent. Otherwise, DVC Emta Coal Ltd will suffer heavy losses.
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