WCL chief hints at hike in power tariff soon

Consumers may be in for a jolt as state electricity boards are believed to be contemplating an increase in tariff following a global rise in the price of coal.

The chairman cum managing director (CMD) of Western Coalfields Ltd (WCL) Ashok Mehta, while talking to newsmen here, said WCL had not revised prices for the past two years.

"We haven't accounted for four per cent inflation, four per cent rise in wages and 4.5 per cent rise in maintenance costs," he said, hinting at an imminent price rise.

Mehta said price was being deliberately kept low as power generators were WCL's main customers.

"The cost of power will go up and impact the common man," he said.

Sector experts said the situation can not be allowed to continue for long and that WCL along with other coal producers around the country would have to revise coal prices upward.

"This may have been delayed on account of the elections. The feel-good factor would have taken a big hit had price of electricity gone up at this juncture," said a senior executive with the National Thermal Power Corporation Ltd (NTPC) at Mumbai.

Requesting anonymity, he said there was still scope for the coal companies to cut costs, but "this would entail increasing automation and reducing manpower plus putting more checks and balances for reviewing purchase decisions of coal companies".

Mehta said the cost of coal has gone up in the international markets as China announced a targeted production of 20 million tonne of steel in the current financial year.

"China has booked the entire production of mines in South Africa and Australia and hence imported coal is no longer an option for consumers here," he disclosed.

Mehta said that ocean freight too had gone up by three times over the year making import of coal an unviable proposition.

He said, WCL's production was also booked in advance and the coal company was hard-pressed to increase output. "The demand is for 41-42 million tonne, WCL is producing 38 million tone. How can we possibly supply to everybody," Mehta asked.

Ashok Mehta said nobody in the country was importing coal now and even power stations close to sea ports such as those in Gujarat were seeking coal from Coal India Ltd subsidiaries.