Power utilities tripping on coal import target face penalty

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New Delhi, Oct 28: Power utilities failing to meet their coal import targets will face ‘disincentive’ in the form of corresponding cut in indigenous coal allocation during the last quarter of the current fiscal year.

The coal ministry has sent a notice to all power utilities, warning them to meet their import targets or face linkage cut from domestic coal sources.

FE had earlier reported that the coal ministry was planning to approach the inter-ministerial linkage commitee over the issue.

The matter also came up for discussion during a recent meeting of a sub-group constituted by the Infrastructure Constraints Review Committee. The sub-group noted with concern that power utilities have reported only 25% of the targeted coal imports so far.

Against a target of 13.45 million tonne of coal imports sought by power utilities, it has just managed to import 3.8 mt till September 30. Even during last fiscal (2004-05), power utilities imported just about 30% of targets.

According to sources, the tough stand of the coal ministry on the issue is in the wake of additional pressure expected on state-owned coal producing companies for meeting incremental coal allocation.

The domestic companies are already finding it hard to meet domestic demand of coal as production has not kept pace with demand. If the cut in domestic coal linkages provided to power utilities is done during January-March period of 2006, it would be an unprecendeted exercise.

At the meeting of the sub-group, the public sector Mines and Minerals Trading Corporation (MMTC) informed the members that they are likely to get coal import orders for quantity 7 lakh tonne from Punjab State Electricity Boarad and Rajasthan.

Meanwhile, the sub-group noted with satisfaction that the number of critical and super critical power houses (in terms of shortage of coal) had decreased to eight and one respectively, as a result of constant monitoring.

Against a coal production target of over 400 mt during the current fiscal, coal shotage is expected to be about 39 mt. The coal ministry has provided coal linkages of about 279 mt to power utilities for 2005-06.