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Coal India admits to supply shortage, says NTPC responsible too

Coal India admits to supply shortage, says NTPC responsible too
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First Published: Tue, Sep 09 2008. 11 12 PM IST
Updated: Tue, Sep 09 2008. 11 12 PM IST
New Delhi: State-owned Coal India Ltd, or CIL, the country’s largest coal miner, has denied sole responsibility for fuel shortages at plants run by NTPC Ltd, the biggest power generator, blaming it instead mainly on the latter’s inability to meet import targets.
However, CIL conceded that law and order problems at one of its units—Central Coalfields Ltd, or CCL—had affected supply to some NTPC plants in north India. Such problems include illegal mining and coal theft.
NTPC’s projects dependent on CCL are located in Badarpur (Haryana), Tanda, Unchahar and Rihand (all three in Uttar Pradesh), with a total power generation capacity of 4,195MW.
The power producer is facing an acute shortage of coal at its projects across the country. It has a total coal requirement of 125 million tonnes (mt) per annum and plans to meet demand by importing 8mt in the current fiscal year.
“...I have to admit that persistent law and order problems at CCL had adversely affected dispatch to some of the North India-bound NTPC power plants,” CIL’s chief Partha S. Bhattacharya wrote in a letter to R.S. Sharma, NTPC’s chairman and managing director, that was viewed by Mint.
While CCL registered coal production of 7.132mt, in the first quarter of 2008-09, it has a production target of 49mt for the current financial year. Its customers include state electricity boards, or SEBs, of Uttar Pradesh, Punjab, Haryana and Bihar, Damodar Valley Corporation, or DVC, and Tenughat Vidyut Nigam Ltd.
“Law and order problems are real....They have also resulted in loss of production, damage to properties and fatalities on one hand, and running of a parallel industry on the other, which have led to higher costs of production and unaccounted depletion of resources,” said Dipesh Dipu, principal mining consultant with audit and consulting firm PricewaterhouseCoopers.
NTPC has a total capacity of 29,894MW of which 23,895MW is coal-based.
“There are shortages. It is not a very comfortable position. CIL has been facing problems this year,” a senior NTPC executive, who didn’t wish to be named, said.
For his part, Bhattacharya said the primary reasons for the current shortage are NTPC’s inability to import coal in line with its targets and failure to build additional stock.
“We have met the target laid down by the Planning Commission. On the law and order front, we have to constantly liaison with the state administration to get help from the law-enforcement agencies,” Bhattacharya told Mint.
CIL said it had been able to meet total coal requirements of the domestic power sector in general and NTPC in particular in 2007-08.
It also said 98% of the target for coal supplies to NTPC was met for the April-July period this year.
CIL, in its letter, argued that while NTPC was expected to import 5.630mt of coal during 2007-08, the actual import had been 2.75mt, less than 50% of the target.
Even during the current year, NTPC imported only 30% of the targeted 0.750mt of coal till 18 July.
“We have already placed orders to import 8mt and import is not a very big issue. We are trying to build our stock,” the executive from NTPC countered.
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First Published: Tue, Sep 09 2008. 11 12 PM IST
More Topics: Coal India | NTPC | Power | Supply | Projects |