Power crisis looms in West Bengal as utilities run out of cash for coal

Daily power-cuts as long as 4-5 hours in West Bengal

By Pratim Ranjan Bose

Oct12, 2011
Kolkata :Nearly 90 lakh subscribers in West Bengal, barring Kolkata, now face daily power-cuts as long as 4-5 hours with the State utilities running out of money to pay for coal.

With declining own generation, official estimates suggest the average shortfall in the State is now running up to 600 MW a day.
Revenue gap

According to sources, fearing the frown of the Mamata Banerjee-led government, the power utilities (in generation or distribution) did not approach the regulator for tariff revision this year, and are now incurring a combined cash-loss of over Rs 200 crore a month.

The generation utility, West Bengal Power Development Corporation Ltd (WBPDCL), alone is facing a revenue gap of Rs 140 crore for supplying electricity at 25 per cent below cost price.
Outstanding to CIL

In the absence of budgetary support from the State Government, which is facing highest revenue gap among all States, WBPDCL has run up a huge outstanding of Rs 500 crore to three Coal India subsidiaries.

The bill had actually swelled to Rs 600 crore, inviting repeated reminders (and even stoppage of delivery) from CIL.

While a payment of around Rs 100 crore ensured coal supplies during Durga Puja, the situation worsened soon after the festival. As against a minimum requirement of 15-odd rakes (of 3,500 tonnes each), the coal arrivals are now 9-11 rakes a day.

The State's Power Minister, Mr Manish Gupta, admits that coal delivery, especially from Eastern Coal Fields (ECL), has been affected due to “issues related to delay in payment.”

However, he denied the existence of any funds crisis. He had also blamed CIL for arbitrarily raising prices with effect from February.

“CIL, being a PSU, should ensure supplies to the State at an affordable price,” Mr Gupta said. He was sure the power situation would return to normal in a couple of days.
Precarious situation

Meanwhile, utilities have raised nearly Rs 2,100 crore short-term loans to meet the cash shortfall. While WBPDCL has already exhausted its credit limit and is finding it difficult to raise more funds, the distribution utility has scope to raise Rs 200 crore more — enough to run the show for two more months.

The 25 lakh consumers of CESC Ltd in Kolkata are, however, not facing a crisis, as of now.

Keywords: Power crisis, Coal, West Bengal, daily power-cuts, Electricity

(sourced Business Line)