The Union coal secretary, alerted by Coal India Ltd, has written to the state chief secretaries to ask their utilities to build up stocks of at least 21 days from the meagre amounts held by them now. Most of these letters went to states where the SEBs are keeping stocks of only a few days because they have no money to pay for the coal.

CIL chairman PK Sengupta set the ball rolling by writing to the chairmen of defaulting SEBs and NTPC, which runs the Badarpur plant for the Delhi Vidyut Board. Coal secretary S S Boparai then wrote to the chief secretaries.However, cash-strapped CIL has also pointed out that the SEBs must find the money to pay for the supplies and clear arrears.

The SEBs have been forced to reduce their offtake because of the lack of funds and CIL's insistence that they furnish irrevocablerevolving letters of credit (IRLCs) or pay in advance for 10 days' coal.

As on March 31, 1999, power utilities as a whole had accumulated outstandings of Rs 4,800 crore to CIL.

The CIL chairman has written to Gujarat SEB chairman Nalin Bhatt, West Bengal Power Development Corp Ltd managing director GD Gautama, Maharashtra SEB chairman A Basak, Punjab SEB chairman SK Tuteja, Bihar SEB chairman SMA Haque and NRPC chairman Rajendra Singh.

In one of the letters, the CIL chairman admits that the power utilities can attribute the low stocks to CIL's insistence on payments.

But, he points out, "it is imperative that adequate funds are arranged and acceptance of coal by these power stations is increased so that these power stations do not remain exposed to the risk of stock and consequent interruption in power generation."

Sengupta pointed out that there is a seasonal variation in coal consumption by power stations and production by mines, so there is an urgent need for the stock-buildingexercise.

"Unless the stock is built up, it is apprehended, there could be serious problem in maintaining generation in view of various unforeseen situations involving production and transport of coal," he cautioned.

Sengupta has also made it clear that coal companies can supply more than the stated linkage amount.