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HindustanTimes Sun,20 Apr 2014

PSPCL succumbs to pressure from coal supplier

Vishal Rambani , Hindustan Times  Patiala, October 13, 2013
First Published: 22:10 IST(13/10/2013) | Last Updated: 09:56 IST(14/10/2013)

Succumbing to pressure by the coal supplier, the cash-strapped Punjab State Power Corporation Limited (PSPCL) has decided to pay it an additional Rs. 110 crore annually. The amount will ultimately come from the consumer's pocket.

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About 7 lakh tonne coal is supplied to the PSPCL every month from the mine located at Deocha Pachmi in West Bengal. The mine is operated by Panem, a joint venture of the corporation and Kolkata-based private company EMTA.

The PSPCL has agreed to pay additional charges of Rs. 35 per tonne for coal-sizing and an additional compensation of Rs. 100 per tonne for transportation, which would be around Rs. 110 crore annually. This amount is in addition to the Rs. 50 crore which the PSPCL has provided to EMTA secretly, and is now facing audit objections.

The move has undone the Punjab State Electricity Regulatory Commission (PSERC)'s fuel audit that saved Rs. 306 crore annually to Punjab on 12.5 million tonne of coal supplied to its three thermal plants. Panem faced a cut of Rs. 171 crore annually due to fuel audit.

Most of the coal is supplied to Guru Hargobind Thermal Plant at Lehra Mohabbat in Bathinda and some of this to Guru Gobind Singh Thermal Plant in Rupnagar.

Despite this, the PSPCL is facing shortage of coal supply as Panem has failed to meet the corporation's requirement.

Highly-placed sources said the PSPCL had succumbed to pressure from Panem, which cut down the supply in early June when the paddy season was on the anvil.

The troubled started when the power engineers raised a hue and cry over the poor-quality coal supply and demanded quality audit.

Panem started disrupting the coal supply to thermal plants in Punjab after the coal-testing procedure at the thermal plants was streamlined on account of fuel audit conducted by the PSERC. The audit highlighted that the poor quality coal was supplied and payment of superior-quality coal was demanded.

Upset over the development, Panem started cutting the coal supply by making excuses. A six-member committee formed by PSPCL observed that Panem was disrupting coal dispatches on the plea that the process had become unviable.

Later, keeping in view the erratic coal supply by Panem, the committee recommended additional charges for coal-sizing as per the coal purchase agreement and as an interim arrangement recommended Rs. 100 per tonne over and above the payments being made to Panem. Despite that, Panem has invoked the arbitration proceedings and is not providing the regular supply.

"We are running out of stock, as we are not getting enough supply from the company," said a power generation engineer. He said it had highlighted the PSPCL management's failure to deal with big companies.

PSPCL chairman-cum-managing director KD Chaudhry admitted paying Rs. 100 per tonne as ad hoc payment to the coal supplier. "There were certain issues highlighted by Panem and they have also invoked the arbitration proceedings. The PSPCL has agreed to pay ad hoc payment to ensure regular supply. This amount will be adjusted in final settlement in arbitration," he said, adding that the PSPCL had taken up the issue with Panem to ensure regular supply and it was supplying enough stock now.

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