Monday, 28 Nov 2011
A recent and shocking development in the Indian coal sector has brought planners and bureaucrats face to face with the stark policy conundrum afflicting the sector. It also brought to the fore the criticality of coal as an input for key infrastructure industries in the power, steel, sponge iron, cement and fertilizer sectors.
It all began last week when cabinet secretary Mr Ajit Kumar Seth was chairing a high level meeting on coal shortage. The huddle saw Coal India Ltd revealing that power utilities failed to lift even a single tonne from the 5 million tonne of e auction coal the state owned miner offered it in October.
Such kind of a mute response from the power companies to the coal quantity specially earmarked for them on demand enabled CIL the world’s largest coal miner to emerge clean in the ongoing tussle with the power ministry over fuel shortage for power plants. The Kolkata based company had offered the quantity in a one-of-its-kind experiment involving diversion of coal meant for spot sales to the power sector.
The ministry had accused the Maharatna of curtailing supply to power companies and selling coal on e-auction to fetch higher prices. E-auction had to be stopped for a few days to accommodate the diversion experiment which worked as a litmus test for the power sector’s offtake capacity.
A senior CIL official said that “Just that power companies could not lift the offered coal proves that banning e auction, as has been demanded, is not a solution. He told that “Coal India cannot be held responsible for the power sector’s woes on fuel crunch. We have enough coal to supply to power sector utilities, but they have failed to lift it.”
The primary reason for the subdued response by power utilities to e-auction coal is logistical difficulty. As a matter of policy, any coal quantity tied up at e-auction has to be lifted from mine heads, significantly increasing the buyer’s input cost. The cost of transporting coal through road is on an average at least five times higher than Indian Railways’ INR 125 per tonne kilometer charges.
Besides, the quality of coal sold in the spot market is also a suspect, according to experts. “While e-auction coal was offered to us, we did not take part because of concerns on transportation and quality.
(Sourced from BS)
A recent and shocking development in the Indian coal sector has brought planners and bureaucrats face to face with the stark policy conundrum afflicting the sector. It also brought to the fore the criticality of coal as an input for key infrastructure industries in the power, steel, sponge iron, cement and fertilizer sectors.
It all began last week when cabinet secretary Mr Ajit Kumar Seth was chairing a high level meeting on coal shortage. The huddle saw Coal India Ltd revealing that power utilities failed to lift even a single tonne from the 5 million tonne of e auction coal the state owned miner offered it in October.
Such kind of a mute response from the power companies to the coal quantity specially earmarked for them on demand enabled CIL the world’s largest coal miner to emerge clean in the ongoing tussle with the power ministry over fuel shortage for power plants. The Kolkata based company had offered the quantity in a one-of-its-kind experiment involving diversion of coal meant for spot sales to the power sector.
The ministry had accused the Maharatna of curtailing supply to power companies and selling coal on e-auction to fetch higher prices. E-auction had to be stopped for a few days to accommodate the diversion experiment which worked as a litmus test for the power sector’s offtake capacity.
A senior CIL official said that “Just that power companies could not lift the offered coal proves that banning e auction, as has been demanded, is not a solution. He told that “Coal India cannot be held responsible for the power sector’s woes on fuel crunch. We have enough coal to supply to power sector utilities, but they have failed to lift it.”
The primary reason for the subdued response by power utilities to e-auction coal is logistical difficulty. As a matter of policy, any coal quantity tied up at e-auction has to be lifted from mine heads, significantly increasing the buyer’s input cost. The cost of transporting coal through road is on an average at least five times higher than Indian Railways’ INR 125 per tonne kilometer charges.
Besides, the quality of coal sold in the spot market is also a suspect, according to experts. “While e-auction coal was offered to us, we did not take part because of concerns on transportation and quality.
(Sourced from BS)
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