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CIL will give top priority to power generation projects, Sriprakash Jaiswal, , Union Coal Minister

29 Nov 2012

Even as the country is touted to face 192 million tones of coal shortage during the current financial year, making it difficult for power generating companies to bridge electricity demand and supply gap, Union Coal Minister Sriprakash Jaiswal is confident that the heat of low supplies will be minimized for power generating firms.

Considering the fact that coal output is not showing the desired growth, the country may face huge power generation shortfall in the times to come. How do you plan adequate coal supplied to power companies?

We are making all efforts to increase coal availability to power sector and I have asked Coal India to give top priority to electricity generation projects. Given the fact that CIL has achieved nine percent jump in coal production during the first half of the current financial year, I am confident that the company will exceed its full-year target of 464 million tones.

Despite CIL overachieving its production target for the current financial year, the gap between demand and supply remains. How do you propose to solve it?

In the current scenario when country’s coal output in behind the demand, power generating companies will have to import part of their requirement. When Coal India inks fuel supply agreement with power companies it provides a provision where it can import the balance quantity for the power company on cost plus basis. However, if the power company does not want Coal India to import, the same cannot be put against the public sector unit.

One must also appreciate the fact that coal supplies to the power sector, rose 12 per cent to 170.17 million tones during the April-October period. The government is committed and making efforts towards improving supply side.

There are issues on coal imports as well. There is a set of power companies that want coal price pooling whereas there are companies with captive coal blocks, who oppose the move. What is the way forward?

Coal ministry has consulted CIL on the issue and we are discussing the matter with the Power Ministry, and as and in when the final decision is taken the CIL board will consider it. Please remember the board can always review the decision with regard to the imported coal on the cost plus basis. So it would be little too early for me to say what could be a compromise formula but our aim is to ensure smooth supplies of coal to the end user.

Sir, even after long deliberations of fuel supply agreements with power sector companies, only 29 companies have signed the agreement. How long do you think would Coal India take to sign the pact with other power companies?

Following the discussions among various stakeholders, Coal India is ready to sign FSAs with 80 percent trigger level. In the current situation, we expect power utilities to sign FSAs by the end of November. The 80 percent supply is inclusive of 15 percent coal that CIL may import for the power utility on cost plus basis. Imported coal would be supplied on cost plus basis only on confirmed commitments from the consumers.

Please give us a sense of what is happening to the coal blocks that your ministry has de-allocated following the recommendation of inter-ministerial group.

We have shared the details of the de-allocated blocks with the Law Ministry. And we have asked Law Ministry to review the progress on the blocks and suggest as to how we can de-allocate the blocks and also the process through which we can deduct their bank guarantees.

What is your plan of action against the companies that have misrepresented facts and have been allocated coal blocks? CBI is already investigating such cases.

If such a case is brought to our notice, we will seek advice from the Law Ministry. So far, CBI has not shared anything with the coal ministry on these issues. If the agency recommends any case us, we will seek the opinion of Law Ministry and initiate action accordingly.

Coal ministry had taken back coal blocks from state run NTPC last year because of slow progress. Is there a possibility of giving those blocks to NTPC again?

We may not award the same blocks to NTPC that were taken back last year. But we have assured the public sector power utility that we will give coal blocks on a priority basis in the new process which we have started. We have explained the matter to the power ministry and they are satisfied.