Coal India may have to revise output target again

Coal India may be asked to revise its previously scaled-down annual production target following heightened pressure from the industry as well as from the Prime Minister’s Office.

Coal India chairman Narsing Rao, however, confirmed that a revision in targets was in the offing.

“Targets would be about production and off-take, and any revision has to be upwards obviously,” Rao told reporters after a review of Coal India’s first quarter performance by the minister.

Coal India had earlier scaled down its production target for this fiscal a notch from the 470 million tonne (mt) set in April to 468.74 mt.

In 2011-12, it had logged in 435.84 mt.

The coal ministry’s plan to raise the production target comes on the back of Coal India fulfilling 100% target set for the April-June quarter, achieving a production of 102.46 mt.

Off-take at 112.92 mt is 99% of the target set, said Jaiswal.

Even as it plans to raise its production, Coal India is still undecided on whether to take up the responsibility of acting as country’s importer of coal to meet the domestic demand-supply gap.

“Country is facing a shortage of coal today. There is a shortage of about 80-90 million tonne in the power sector. Coal India can import, but if we have to import and supply to the consumers at the same price, then they might not see any big value addition in us doing the job of import,” said Rao.

“There is another proposal of Coal India doing price pooling. It is not a mechanism to solve everybody’s problem. The impact will be that average cost of imported coal will fall a bit while that of domestic coal will go up a bit if we resort to the system of price pooling. All these things are being debated. A decision is likely by the month-end,” the Coal India chief said.

A decision on the contentious issue of fuel supply agreement (FSA) is also likely to be taken by the end of July, the minister said.

While 50% of power plants have signed the FSA, the biggest of them, NTPC has refused to do so demanding reworking of the existing pact.

The upcoming board meet of Coal India on July 10 is likely to finalise the revised FSA, which could incorporate a lower commitment of 65% of a power plant’s coal requirement and raise the amount of penalty if such a promise is not met.

Source: DNA