NTPC seeks report on transporting coal through waterways

State-run National Thermal Power Corporation (NTPC), the country’s largest power utility, has asked for a “holistic” feasibility report from the Inland Waterways Authority of India (IWAI) for transporting coal for its thermal power plants through inland waterways.

“We have asked for a more holistic feasibility report from the IWAI as we want to have the ability to move fuel rapidly. We are essentially looking at being flexible and want to develop this (inland water transport) as a solution,” a senior NTPC official said.

In September 2008, NTPC and the IWAI had signed a memorandum of understanding for movement of imported coal from Haldia to Farakka, Kahalgaon and Barh power stations.

Under the MoU, NTPC will commit to transport two-three million tonnes coal and assured return cargo of fly ash from its power plants, while the IWAI will provide the navigational channel for movement of barges, undertake project development and design suitable framework for induction of the private player for carrying out the movement.

Subsequently, the IWAI submitted a feasibility report for the project. However, NTPC found it insufficient and asked for another report, the official said.

Eastern Coal Fields is unable to supply more than 15 million tonnes coal to Farakka and Kahalgaon power stations, as against their requirement of about 27 million tonnes per annum. The current stocks at several other power stations are “supercritical”, according to an IWAI document, which is likely to ensure NTPC’s continued dependence on imported coal.

“The quantum of coal being imported by NTPC has been going up steadily over the last couple of years as there is a substantial gap between the demand and the supply being delivered by Coal India. Also, power and cement industries have been facing shortage of rakes as the railways have given priority to transport of food articles.

“So, NTPC will have to look at alternatives as it doesn’t want to sacrifice its plant load factor. But the cost of transportation through inland waterways could be a cause for concern,” said an analyst with Angel Broking.

The combined cost of the Haldia to Farakka plant and Haldia to Kahalgaon plant is pegged at Rs 660 crore, including the cost of barges, trans-shippers, terminals at both plants and material handling equipment.

“The operation will be undertaken by private operators and we will float an international tender once things are finalised,” an IWAI official said.

However, a source indicated that private participation would be difficult unless the basic infrastructure was in place. “If the public private participation route is to be used, the government must first prove the viability of the project. We need night navigation, markings, depth indicators and terminals,” the source said.

The IWAI, too, in another document, has pointed to the fact that a long-term contract of 7-10 years will be required as private firms will need to invest upwards of Rs 600 crore. For this, NTPC will have to firm up long-term coal supply contracts. Also, government permission will be required for the fuel transportation agreements with the IWAI.