The Prime Ministers office has asked Coal India Ltd to seek
offtake commitments from power utilities before imports and supply coal to
power companies. A CIL executive also said that the company could ask
designated national trading agencies such as MMTC to import coal on its behalf
in the short term, until deals with global coal majors for long-term offtake materialize.
Power companies are unwilling to buy imported coal from CIL because of the
added cost of service charge or the lack of clarity on which the party bears
logistics cost.
The PMO has ordered CIL to import over 70 million (mt) beginning
next financial year to meet the demand. A senior coal ministry official told Business
Standard: “We will meet import requirements of the power sector if the coal
ministry asks us. But a similar plan to import for power companies failed last
year in the absence of committed offtake. If the import plan has to work this
time, firm commitments have to come. Also, companies must import on their own
too”.
Around 12,000 Megawatt (Mw)Of the 15,600-Mw power generation
capacity expected to be commissioned this year is likely to be coal-based.
A case in point is the historic feud between CIL and power
generator NTPC Ltd where the miner was to supply imported coal for NTPC's
plants. “Talks failed as NTPC insisted on delivery at the plant site and CIL
was not willing to bear the charges for transportation. So, NTPC had to resort
to direct imports”, said a senior official from NTPC who did not wish to be
identified.
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