Coal shortage is a national issue - Mr Ravi Sharma

Tuesday, 05 Jul 2011 | source CNBC-TV18

In an interview with CNBC-TV18, Mr Ravi Sharma CEO of Adani Power said that coal shortage is a national issue and not an individual company's concern. He added that companies without integrated business model are likely to be affected by the shortfall.

Q - Talking about the coal issue, we have noticed that Indonesian coal cost have gone up and that would naturally impact coal importers like yourself how would that damage or at least hurt your bottom-line?

A - I will give the answer to your question in two stages: first, People are aware that our company follows an integrated model. We have our own coal mine, ports, ships which we use in our power plants. In integrated model, any impact would only be marginal or minimal. All the same, this index pricing of Indonesia is not a new phenomenon. It has been going on for the last three years and got implemented about two years ago. So, it is not something new.

Second, coal shortage is not anymore an issue for an individual company. It is the national issue. Coal India produces about 550 million, about two third of that is allocated to power. Now, the allocation for 2012, considering plans which we have for the power plant, there is a shortage of 70 million tonne in power plants. So that means about 15,000 to 20,000 megawatt capacity will not be able to move.

Going ahead to 2017, India will have to import anywhere between 150 million to 350 million tonne to meet its requirement. And, if that is not done then you can understand how much losses of production will happen. So it is no more an individual phenomena on a company, it is the country's concern today.