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Coal India production up, but legacy problems like “Culture of Differential” still pose problems for power producers.

“Coal that is supplied to power plants is of lower quality (lower calorific value) than what is deemed to be supplied,” Ashok Khurana, director general, Association of Power Producers (APP) said.

ashok khurana

“Both the parties will benefit due to joint inspection. I understand that it will take time to end the culture of differential delivery, but the issue will be resolved in the next two to three years. All power producers including public sector undertakings like NTPC are facing problems due to this issue,” Khurana added.

Coal India Limited (CIL) has increased production of coal by 9.6 per cent in the first ten months of the financial year 2016, this enabled CIL to supply committed quantity of coal to power plants, but at the same time power producers are a worried lot as coal supplied by Coal India Limited (CIL) turns out to be of lower quality than what was deemed to be supplied, claims Khurana who has taken up this issue with the Ministry of Power.

Speaking to News World India, Khurana claimed that APP takes up such issues from time to time with the ministry to convey the industry’s feedback. “The power production industry faces problems when they order a particular quality of coal, while CIL supplies them coal of a lower quality, whose calorific value is 400-500 kcal lesser than what was ordered, this is a very big issue.”

In a highly competitive market, the power producers not only end up being overcharged for coal supplies, but also face problems as they have to burn more quantity coal as they are supplied coal of a lower quality then committed.

Khurana cites that the Ministry of Coal and Power are working on a mechanism where after March 31 this year, there will be joint inspection of coal on both the buyers and sellers end, and the quality of coal mentioned in the bill will be compared with the coal supplied. “Both the parties will benefit due to joint inspection. I understand that it will take time to end the culture of differential delivery, but the issue will be resolved in the next two to three years. All companies including public sector undertakings like NTPC are facing problems due to this issue.”

One big benefit that the new system will bring is that, price of coal will not be paid to CIL according to the coal that was loaded, but will be paid according to the coal that is received by the customer. Khurana reiterated that one agency will check the quality of coal at the time coal is loaded on the railway wagon or a truck, and secondly, the coal quality and quality will be checked one more time at the time the coal is unloaded from the wagon. This step will ensure that any pilferage does not take place.

Meanwhile, CIL Chairman Suthirth Bhattacharya told the media recently that CIL is actively working on a GPS-based vehicle tracking system as well is installing electronic surveillance at weigh bridges which will help check pilferage. He also promised that CIL is working on initiatives that will make grade slippage a thing of a past.

Suthirth Bhattacharya