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Coal shortage sparks jitters in metals sector

The captive producers said they are receiving 15-20% less than the committed quantity of the raw material

Megha Manchanda  |  New Delhi 

Coal Shortage in India

Production in the metals sector has taken a hit as the captive power plants supplying power to the sector are forced to run at 50 per cent capacity due to Indian captive power producers' association said that the state-owned was not honouring the (FSA) for supplying Captive power plants (CPPs) have an installed capacity of about 40,000 MW and require 190 million tonnes of annually. As much as 3.6 million tonnes of is pending with the The have said that they receiving 15-20 per cent less than the committed quantity of the raw material. They are getting average 50 per cent against secured linkages and Annual Contracted Quantity. Captive power industry that has a debt of $30 billion is only able to service 50-70 per cent of it.

The dispatch to CPPs has been affected since April 2017. During this period, even though the was available, the captive units were not allotted rakes and the (IPPs) were preferred on dispatches. The are suffering huge financial pressure because of the subsidiaries taking advance payment and bank guarantee against the allotment of but not dispatching as per allotment, blocking CPPs funds for six-nine months. "Most of the based industries are facing severe and struggling even to maintain critical stock level. Reduced power generation is rendering operations economically unviable with huge risk plant closure," Rahul Sharma, Chairman, Indian captive power producers' association said. The metals industry is currently relying on imported and spot power market to meet its For the comprises 40 per cent of the total cost of production, as a result of the production expenditure has gone up by $300 per tonne.

SUPPLY CONCERNS Indian captive power producers’ association says is not honouring fuel supply pacts Captive power plants have an installed capacity of about 40,000 Mw The captive power industry has a debt of $30 billion

First Published: Sat, December 16 2017. 20:29 IST
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