BUSINESS_STANDARDCoal India's negative balance to hit consumers...

BUSINESS_STANDARDCoal India's negative balance to hit consumers Jayajit Dash | 2010-04-01 01:30:00

Coal consumers, who are sore over the dwindling coal supplies from the linked coal blocks of Coal India Limited (CIL), may even face worse times ahead as the navratna coal company is set to end 2010-11 with a negative coal balance of 110 million tonnes.

A negative coal balance implies that the coal PSU does not have enough coal to meet the requirement of its linked consumers in various sectors.

Consequently, the coal consumers have to remain content with lesser coal supplies compared to the annual contracted coal quantity which they are entitled to get.

When contacted by Business Standard, a top CIL official said, "The latest meeting of the Standing Linkage Committee (SLC) was held on January 26 this year. Even though the committee took note of our concerns pertaining to the negative coal balance, they did not give us any concrete assurance on the matter."

If the SLC goes on giving linkages to consumers without realizing our problems, we will be forced to cut supplies as we do not have adequate coal to meet their requirement.

This negative coal balance is set to increase further to 235 mt in 2011-12 and 305 mt by the end of 2012-13. CIL has 2009-10 with a negative balance of 89.75 mt. The committed demand on CIL for 2010-11 excluding the coal to be sold through the e-auction route and the coal requirement of thermal power plants (TPPs) coming beyond March 31, 2009 works out to be 442.68 mt for consumers in different sectors.

Taking into account the coal requirement of 81.79 mt for TPPs and 46. 05 mt for sale on the e-auction platform, the total coal commitment of CIL works out to be 570.52 mt.

However, CIL's production in 2010-11 is projected at 460.50 mt, thereby leading to the negative coal balance of 110.02 mt.

The projections of these latest negative coal balances have been worked out by CIL for those consumers whose linkages have been cleared by the Standing Linkage Committee (SLC) on coal under the Union ministry of coal.

The coal balance position has been prepared by CIL after considering those consumers who have actually deposited commitment guarantee and also including other commitments arising on CIL sources out of clearances granted by the SLC (long-term) either as long-term linkage or as clearances for issuance of Letters of Assurance (LoA). Acording to CIL's estimates, the negative coal balance situation is set to continue throughout the decade even if no further LoA is issued by the SLC. It may be noted that on January 11, 2010, CIL chairman Partha S Bhattacharyya had written a letter to the Union coal secretary, apprising the latter of CIL's negative coal balance status.

In the letter, Bhattacharyya had said, "Any fresh clearance by the SLC will force the existing as well as projects in the pipeline to depend more on imported coal. These projects already being in various stages of execution may not be in a position to use the imported coal to the required level due to technical limitations. It is therefore important that the new projects should be properly sensitized for using imported coal."

In his letter, the CIL chairman had demanded the allocation of 138 additional coal blocks to help the coal major increase the availability of coal during and beyond the 12th Plan period.