Thursday, September 29, 2022

NTPC’s declining coal pile prompts CIL to come to its rescue

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New Delhi: Coal India Ltd (CIL) has said that it is ready to renew its offer of 5-million-tonnes of additional coal to NTPC Limited from its fresh stock so that they can build up inventory ahead of summer when power demand rises. However, it may not be easy for NTPC to evacuate coal from the coalfields at the earliest. Earlier, the power PSU could not lift the offered coal because the offer came with a 30-day deadline. According to NTPC executives, lifting the coal was a big hurdle.

NTPC needs coal to build up inventory

A senior CIL official said that the offer was renewed keeping in mind that NTPC needed to build up inventory during winter, ahead of summer, after which demand for power rises and so does demand for coal from thermal power plants. “Increasing supplies at a very short notice is not always possible as railways may not be in a position to increase rake availability overnight,” he said. NTPC’s stocks have declined sharply after news emerged that its coal pile was depleting. It was offered 1.5 mt from Central Coalfields, 0.5 mt from Bharat Coking Coal and 0.5 mt from Northern Coalfields among others.

‘Offer may not be open for long’

However, sources at CIL said that it may not be possible for the public sector undertaking (PSU) to keep the offer open for long as freshly-extracted coal deteriorates in quality with time or may catch fire. “Once extracted it needs to be sold,” he said. A huge stack of coal kept in open for long can catch fire, or lose energy content because it absorbs moisture.

Stuck in bureaucratic snarls

At NTPC, sources said that the delay in transportation of coal was caused primarily because it was trying to arrange road transportation of the coal from pit head to railways’ loading facilities. It would cost the company upwards of Rs 300 crore. And being a PSU, it needed to invite bids from transporters and go through the procedure of selecting successful bidders which generally takes over a month for such a large tender. Additionally, evacuation of coal via road can only be done 12 hours during the night due to pollution concerns. “A large fleet of trucks leaving the coalfield during the night would lead to constriction of roads in the area,” he said.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Telegram. Join PSU Watch Channel in your Telegram and stay updated)

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