HC orders coal cos to respond on poor quality, less quantity

The Bombay High Court has directed coal companies to respond to serious allegations made by the Maharashtra Power Generation Company Limited (MahaGenco) pertaining to short supply and inferior quality of coal, which has resulted in a huge power mess.

A division bench here comprising Justice Bhushan Gavai and Justice C V Bhadang while recently hearing a PIL filed by Anil Wadpalliwar on the turf-war between coal and power utilities and the resultant loss to public exchequer as well as people at large, ordered the coal companies to file their reply by April 25 and posted the matter for April 30.

The High Court had last year too asked the coal companies to come clean on short-lifting of raw domestic coal which is available in plenty with coal utilities near pit-head, justification about importing coal at exorbitant cost; and passing the burden on hapless consumers besides steps taken to increase generation and ensuring cheap and uninterrupted electricity to power-generating districts like Nagpur, Chandrapur and Akola etc.

Now, Maha Genco in its latest affidavit has once again blamed the coal companies for its woes as they have not only given poor quality of coal but has also failed to deliver coal in the agreed quantum.

The affidavit also asserted that in the past three years, Western Coalfields Limited (WCL) had supplied less quantity of coal.

In 2011-12, the WCL supplied 76.84 per cent of the total agreed quantity, in 2012-13 it was 77.10 pc while in 2013-14, the WCL supplied only 74.71 pc of the agreed quantity, the affidavit said justifying the import of costly coal to bridge the gap.

Even from Mahanadi Coalfields Limited, there is consistent short supply of coal which has compelled it to make alternate arrangements, the affidavit claimed while stating that in last three years it received only 53.01 pc, 44.50 pc and 44.82 pc of the agreed coal from MCL.

The MahaGenco, in its earlier affidavit had squarely blamed Western Coalfields Limited (WCL), South Eastern Coalfields Limited (SECL) and Mahanadi Coalfields Limited (MCL) with supplying low quality coal and charging much more from it.

The total burden on account of grade slippage is Rs 2,160 crore in financial year 2012-13, MahaGenco had claimed in an earlier affidavit filed before the High Court.

This burden has resulted in a rise in power tariff which has been ultimately passed on to consumers and recovered from them, the MahaGenco has claimed.

It also alleged that due to poor quality coal supplied by WCL it paid Rs 1,000 crore more (Rs 573 per metric tonne) on account of grade slippage, Rs 1,100 crore to SECL (Rs 1,896 per metric tonne), Rs 60 crore to MCL (Rs 123 per metric tonne).

In case of South Central Coalfields Limited, the MahaGenco fairly conceded that SCCL conducts sampling and analysis at both loading and unloading ends and there is no financial burden on account of grade slippage.

MahaGenco receives 22.71 million metric tonne coal every year from WCL which is 46 per cent of the total linkage quantity and at least 90 per cent of the coal supplied by WCL is two-three grades below the declared grade, the previous affidavit had claimed.

The power utility also receives 6.027 million metric tonne from SECL, 15.51 million metric tonne from MCL and 2.26 mmt coal from SCCL.

Receipt of inferior quality coal of high ash content from all subsidiaries of Coal India Limited is a major concern for MahaGenco, the affidavit stated.