The non-power sector, which has been long starving for coal, has started witnessing increase in supplies from April 1, following comfortable stock situation in the power plants. The increased flow of the fuel has become a boon for many, a section of non-power consumers has been struggling to manage inventory. Since April 1 this year, Coal India (CIL) has reduced its backlog by more than 44% liquidating 2,300 arrear rakes during the three months period. The arrears stood over 5,100 rakes at the beginning of the current fiscal, a CIL spokesperson said.
Each rake can load 3,800 tonne of coal and so around 8.7 million tonne of backlog have been cleared of the total backlog of around 19 MT piled up during 2017-18 and 2018-19 . The rest is expected to be cleared in the next few months , a CIL official said. CIL supplied 33.7 MT of coal to non-power consumers since April this year till date against 29.95 MT during the corresponding period last fiscal. While the supplies to the non-power sector has accounted for 22% of the total coal supplied so far this fiscal, last year it was 19% of the total fuel supplies during the same period.
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The bulk of non-power sector consumers comperise of captive power producers and cement manufacturers. It is an ideal situation for big players since they are getting coal more than their monthly contracted quantity. But relatively smaller players are facing the heat because they lack the capacity to maintain a large stock. In several cases, smaller players are forced to refuse the additional supplies.
CIL sources said the coal fired power stations are comfortably stocked with over 25 MT of coal along with 32 MT of stock at the pit heads. There is sufficient coal in the system, which gives CIL the leeway to clear off all arrear rakes to the non-power consumers, a CIL official said.
During the middle of FY17 there was low demand of coal from the power sector and CIL subsidiaries had shifted their bookings for the non power consumers. But from the second quarter of FY18 there was sudden upsurge in demand of coal from the power sector, and CIL in order to boost up supplies to the stressed power plants, rushed coal to their end on a priority basis. The entire supplies to the power sector was done through railway, for which rakes were not available for supplies to the non-power sector. But bookings for the non-power sector were already made, for which the backlog started building up.
However, to meet the requirement of the non-power sector at that time, CIL offered transportation of coal through road. While some were forced to lift costlier coal via e-auction, there were not enough takers via the road mode because of costlier logistics.
A consumer not willing to disclose his identity said, “we did not get our contracted amount when it was required and therefore we had to manage our requirement from other sources. Now if CIL supplies us extra coal, more than the contracted quantity, what do we do with that? We are forced to refuse the additional rakes but it is still not clear whether the railways would refund our two years back booking amount if we refuse to take the backlog supplies at present.”