KPCL saves Rs 470 cr

Cancels coal washing orders.

Karnataka Power Corporation Ltd (KPCL), the state-owned power producer, has saved Rs 470 crore by doing away with its coal washing contract. The corporation, which had awarded the contract to three north Indian companies between 2003-04 and 2008-09 spent Rs 3,000 crore for washing coal, which was avoidable, a top company official said.

“I am giving you the facts. Coal washing was actually not necessary and now we have cancelled the contract and in the last year we have made a saving of Rs 470 crore. The consumption of coal at our boilers has marginally gone up and there has been no problem with the usage of unwashed coal,” S M Jamdar, managing director, KPCL, told reporters, here.

Opposition parties in the state legislature assembly had repeatedly raked up the issue alleging that chief minister B S Yeddyurappa was involved in the scam, which the chief minister had rejected.

By cancelling coal washing contract, KPCL had also saved 1.16 million tonnes of coal which the washing agents used to retain as rejected lot and later sell it for around Rs 475-900 per tonne.

Jamdar said, coal procured from the Mahanadi Coal Fields in Orissa requires washing as it contains high levels of ash whereas coal from other companies like Singareni Collieries Company Ltd (SCCL), Western Coal Fields and imported from Indonesia does not require washing. Presently, the company is procuring from SCCL and importing from Indonesia.

While, the company has saved Rs 219 crore from doing away with coal washing, it saved another Rs 170 crore by retaining “rejected”coal, which would have occured due to the washing. By stopping the washing of coal, the company has also brought down its cost of power generation by 14 paise per unit, which amounts to Rs 149 crore for the whole year. It has also brought down the cost of transportation of coal by bringing it directly on rail from Talcher to Raichur. Earlier, it was brought via ship and cost extra money for the company, Jamdar explained.

He said many of the employees of KPCL were involved in the coal washing scam and the company has initiated judicial inquiry into the dealings.