States raise concerns over coal supply for power plants

Gujarat openly criticized centre for 'discrepancy' in coal allocation

Constrained coal availability emerged as the common concern raised by a majority of Indian states during their meeting with the power ministry today. The issues included lack of allocation of adequate reserves and linkages from the domestic miner Coal India for state power utilities.

Gujarat openly criticized the centre for “discrepancy” in coal allocation. “There is serious concern about the quality of coal allocated to the state. The generation company faces the problem of 3-5 grade slippage in coal supplies. Also we have been asking for additional blocks for many years. But nothing has happened,” Gujarat energy minister Saurabh patel said at the meeting chaired by power minister Jyotiraditya Scindia.

He also said his states is losing revenue owing to the high freight cost associated with transporting coal  from other states in the absence of linkages near to Gujarat. “In case coal is supplied from Western Coalfields (nearby mines), it would reduce the burden of on the consumers of the state by around Rs 1,000 crore per annum,” he said.

Madhya Pradesh also sought immediate allocation of blocks for its projects. State energy minister Rajendra Shukla said the 1,320 Mw Singaji power plant in Khandwa district has achieved financial closure but further development activities are held up owing to lack of coal linkage or allocation of any coal block by the centre.

Other issues raised by the power ministers of states included lack of funds and infrastructure constraints for implementing the two ambitious distribution sector schemes – Accelerated Power Distribution and reforms Programme (APDRP) and Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY).

Scindia said that certain discoms are resorting to load shedding even while power is available, which leaves a lot of capacity stranded. “It has been noted that in 2012-13 so far, tariff revision has taken place in 18 states. While tariff has to reflect the true cost of service, the need to minimize losses is necessary to cut tariff burden on the consumer. States need to enforce financial discipline in the operations of discoms,” he said.

The states promised to ensure ensuring their accounts upto 2011-12 are audited and finalised by March 2013. Also, they resolved to have auditing of a financial year by September of the following financial year as per the Companies Act.