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Bid to end coal tiff

New Delhi, April 10: The power ministry has sought the intervention of the cabinet committee on investment (CCI) to ensure that Coal India supplies coal as desired by NTPC and DVC.

More than Rs 2,000 crore of payments for coal use is locked up in the dispute between the two power utilities and Coal India.

Headed by Prime Minister Manmohan Singh, the CCI seeks to unlock large investments held up because of red tape or inter-departmental spats.

The power ministry wants the CCI to direct Coal India to supply coal above 3,100 kilo calories (kcal) to NTPC. Low quality coal is not only forcing NTPC to conduct repeated boiler maintenance but also reducing the life cycle of the plant.

The cabinet note circulated by the power ministry said: "Boiler and auxiliaries may be able to sustain such low-calorific value coal for limited period, but operation over an extended period results in excessive wear and tear and requires high level of blending with imported (better quality) coal."

Power plants in the country use coal with a calorific value of 4,000-5,000 kcal. However, low grade coal, or coal mixed with stones or dirt, is often shipped making it tough for the power plant's boilers to work.

Further, Coal India insists on sampling the coal at its own stockyards before shipping it. By the time the coal reaches power plants, sources say, organised gangs steal part of the coal and replace it with stones and dust.

The cabinet note points out that "due to large scale grade slippage between the sampling invoiced by coal companies and analysis done by NTPC at station-end, disputes have arisen".

In DVC's case the problem is different: DVC runs the 1,000 megawatt Durgapur Steel Thermal Power Station buying coal from Eastern Coalfields (ECL). It buys grades "C" to "E". ECL, which has surplus of better grade coal, wants it to buy a mix of grades "A" through "E". DVC says this will add to its cost. "DVC is not in a position to accept higher grade coal as the same makes the project unviable due to high energy cost and no distribution utility is ready to buy power from these units," the note said.

Quiz: How well do you know India's economy?

Question 1

Which of these products is India the world's largest producer of?

Poll Choice Options
  • Wheat
  • Rice
  • Milk
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