CAG asks Nalco to develop coal blocks at earliest to ensure fuel supply to power plant

Noting that state-owned Nalco was not able to develop coal mines allotted to it for fuel supply to the captive power plant, government auditor CAG Wednesday suggested the PSU to develop the blocks at the earliest.

"Nalco was not able to develop the coal blocks allotted by government ...for supply of coal to the captive power plant for generation of required power for smelter plant.

"The recommendations of CAG to the NALCO/Ministry (Mines)...the allotted coal blocks may be developed at the earliest to ensure supply of coal to the Captive Power Plant," the CAG said in its report tabled in Parliament.

Stating that there was a shortfall of 4.93 lakh tonnes in aluminium production in the period 2012-13 to 2016-17 for want of required power, CAG said as a result, Nalco lost the opportunity to earn incremental contribution amounting to Rs 1,086.63 crore during the period.

"Audit observed that NALCO incurred additional expenditure of Rs 326.62 crore towards excess consumption of coal in the captive power plant during the period from 2012-13 to 2016-17 due to higher Station Heat Rate as compared to the norms," it said.

The government auditor observed that as National Aluminium Company Limited (NALCO) was not able to detect slippage of coal quality due to non-availing the facility of joint sampling of the dry fuel at the loading point.

"This has resulted in avoidable expenditure of Rs 239.23 crore towards grade slippage of coal during the period 2012-13 to 2016-17," it added.