Punjab coal supply hopes rest on uncertain mine allocation

  • Gurpreet Singh Nibber, Hindustan Times, Chandigarh
  • Updated: Feb 25, 2015 11:07 IST

There's uncertainty over the reallocation of Jharkhand's Pachwara mine to Punjab State Power Corporation Limited (PSPCL), and so the coal supply to the state-owned power plants in Rupnagar, Bathinda and Lehra Mohabbat also looks doubtful after March 31.

Even if the mine is reallocated, it'll be for more than `1,100 crore, a cost that will be passed on to the consumers. The PSPCL along with a joint-venture company of National Thermal Power Corporation (NTPC) and the Railways has bid for the mine. As to why it wants the same mine again is best known to it.

The reallocation tenders wouldn't be opened until March 5, as the deadline has been extended from February 23 to accommodate more coal blocks on the auction list. The Union Coal Ministry will receive bids for another four days (until February 27).

Last September, the Supreme Court had cancelled the allocation of almost all coal blocks, ordered fresh auction, and asked the operators to deposit `295 per tonne as penalty on the fuel consumed. The PSPCL was liable to pay up `1,502 crore, of which it only submitted `389 crore.

Panem, a joint venture company of the PSPCL and EMTA (Eastern Mineral Trading Agency), operates the Pachwara mine. "The PSPCL, by rules required to pay only 26% of the penalty, will have to pay the entire amount because it consumed the entire coal extracted, so far, from the mine," said a senior officer in the state electricity corporation, adding that making part payment was accepting the liability of paying the full amount.

The mine supplies 7 to 8 million tonne coal to the three thermal power stations of Punjab, which fulfils up to 60% of the 13 million tonne fuel requirement of these units.

Panem asked the PSPCL recently to pay for the coal and freight in advance, to which the Punjab council of ministers has agreed. Top officials in the state electricity department consider coal supply uncertain until the ministry completes reallocation on March.

The power-sector experts debate the Supreme Court penalty on the PSPCL, since the Pachwara mine was allotted to the erstwhile state electricity board when Punjab needed cheap coal to cover up its disadvantage of location and save heavy freight cost. "The mine was allotted to Punjab to help it out, and the coal ministry was not earning anything out of it," said a retired PSPCL officer.

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