‘Arm-twisted’ by supplier, PSPCL to pay more for coal | punjab | Hindustan Times
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‘Arm-twisted’ by supplier, PSPCL to pay more for coal

punjab Updated: May 13, 2014 13:06 IST
Vishal Rambani

Succumbing to the ‘armtwisting’ tactics of the coal supplier, the Punjab State Power Corporation Limited (PSPCL) has agreed to pay more for coal for power projects. The higher coal prices will have a direct bearing on consumers as higher fuel prices mean higher power tariff.

Panem supplies coal to state owned thermal power plants from the Pachwara block of Jharkhand. By blocking coal supplies for the past 20 days, the coal supplier has extracted the desired payments from the power corporation management.

The PSPCL management has agreed to pay Rs 100 per tonne as ad hoc advance payment for the coal supplied from the captive coal mine, apart from paying 6 crore daily advance rail freight for coal.

In addition to this, the PSPCL has decided to release 10 crore immediately from the arrears of outstanding dues of coal payment, it is learnt.

These payments will increase the coal rates roughly by 12%, which will directly impact consumers, who will have to pay higher tariff for electricity.

“Though all these payments are subject to arbitration proceedings, it’s clear that the PSPCL succumbed to pressure and agreed to pay more than that agreed upon in the coal purchase agreement signed for 30 years in 2006,” admitted a PSPCL official who is dealing with the coal crisis.

“This has weakened the PSPCL’s stand in the arbitration case against the coal supplier, sources said.

The communication that was put up during deliberations before the corporation’s high-powered committee, which met on Monday, highlights that most of the things were agreed upon by the PSPCL management before the meeting.

The letter written by Bikash Mukherjee, Panem director, refers to his meeting with PSPCL chairman-cum-director (CMD) KD Chaudhri. It says that “your good self has confirmed that the PSPCL will provide ad hoc support for railway freight, 100 per tonne as ad hoc advance payments and release of outstanding amount of 40 crore.”

Panem had stopped coal supply in mid-April on the plea that the operation of the coal mine was not economically viable and the PSPCL must increase ad hoc support to ensure uninterrupted coal supply. The denial of coal from Panem led to the coal crisis, forcing the PSPCL to shut its own thermal plants.

Ironically, Panem has already started arbitration process with the PSPCL to increase its rates for coal supply. Despite several attempts, KD Chaudhri did not answer phone calls from HT.