The problem is that two super thermal power units of NTPC -- Kahalgaon and Farakka -- have reduced their generation by about 30 per cent for the last few months reportedly because the West Bengal and the Bihar state electricity boards are unable to purchase power from them for lack of funds.

This has created a piquant situation for the Rajmahal mines of the Eastern Coalfields which exclusively supply coal to the two power stations on a captive basis. Now massive amount of coal has piled up at the pithead of mines as the two power stations are not lifting the contracted coal, creating operational problems, it is learnt.

While the two ministries are at a loss to find a solution, Coal India's Eastern Coalfields is crying for help. Rajmahal mines are the only profitable mines of this otherwise sick company. Ministry sources confided that the company wasbound to go in the red if the situation persisted for long.

What is causing worry to the coal ministry and the CIL is that the extra coal produced at the Rajmahal mines cannot be diverted to any other destination for lack of infrastructure. The mines have railway links only with the two power stations.

As per the agreement between the NTPC units and the ECL, the Rajmahal mines are to supply 11.5 million tonne of coal to the two power stations annually. Accordingly, ECL has created its capacity by deploying adequate manpower and machinery. Now it is being forced to reduce production by about three million tonne, sources said. On its part, the power ministry seems to be able to do precious little to help solve the problem. It is in no position to force the NTPC units to lift the contracted quantity of coal and produce full capacity of power.

It transpires that both West Bengal and Bihar have been put under "critical list" among states which have no resources to pay for the power purchased fromNTPC.

INSIGHT
Denial of power boomerangs on NTPC

NTPC's righteous denial of power to states which have defaulted in clearing overdues has boomeranged on it. This was only to be expected. The finances of SEBs of all states are strained. Besides, redirecting power requires fresh investment in transmission. So, even if buyers are found, supplying power becomes difficult in the short run. It is hardly surprising, therefore, that NTPC has had to step down power generation at Farakka and Kahalgaon super thermal stations. Reduced capacity utilisation raises generation costs. Furthermore, Eastern Coalfields, which had developed dedicated mines for supplying coal to NTPC, now faces mounting unsold stocks. The coal company has become an unintended victim of NTPC's ire against Bihar and West Bengal.