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HindustanTimes Wed,24 Sep 2014

PSPCL at receiving end as Panem curtails supplies

Vishal Rambani, Hindustan Times  Patiala, September 02, 2014
First Published: 08:51 IST(2/9/2014) | Last Updated: 08:57 IST(2/9/2014)

Apparently arm-twisting the Punjab State Power Corporation Limited (PSPCL) in a bid to get higher coal rates, Panem has curtailed supplies to the PSPCL by 50% this year, leading to a coal crisis and forcing the corporation to go for load shedding.

Coal supplier Panem holds the contract for operating the PSPCL’s captive coal mine in Jharkhand. The company has already invoked arbitration proceedings against the PSPCL, demanding higher coal rates.

Two meetings in this regard have been held, with former Punjab chief secretary RS Mann officiating as the arbitrator.

During the first five months (April to August) of the current financial year, 57 lakh tonnes of coal was to be supplied by all sources. However, only 39 lakh tonnes was received at the PSPCL’s thermal plants, which is 70% of the requirement.

Owing to less supplies, the coal stocks of the three state-run power plants have reached a critical level, as no plant has coal for more than two days of continuous operation. However, widespread rain in Punjab on Monday brought relief for the PSPCL, which had on Sunday imposed power cuts of 190 lakh units across the state.

As per figures, the PSPCL needs a total of 136 lakh tonnes of coal annually at all three state-owned plants. Seventy lakh tonnes are to be supplied by Panem, 35 lakh tonnes by Centre Coalfields Limited (CCL) after washing by Monnet Daniel Washeries, 10 lakh tonnes by Bharat Coking Coal Limited (BCCL), 10 lakh tonnes (direct) by the CCL and 11 lakh tonnes by the South Eastern Coal Limited (SECL).

While central government owned-utilities BCCL and CCL have supplied 65% and 80% extra coal and coal supplies by SECL are almost normal (91%), the supplies made by private firms hired by the PSPCL, namely Panem and Monnet Washeries, are less by 50% and 60%, respectively.

Panem, which was to supply 29 lakh tonnes of coal during these five months, supplied only 14.5 lakh tonnes, while Monnet Washeries has provided only 5.6 lakh tonnes against its quota of 14.5 lakh tonnes. The two firms have together failed to supply 23 lakh tonnes. Had Panem and Monnet made normal supplies, the situation would have been better for Punjab’s thermal plants, a PSPCL official said.

The Punjab government has failed to take any action, despite the fact that the PSPCL’s thermal plants at Ropar, Bathinda and Lehra Mohabbat are starved of coal on account of non-supply of committed quantity by Panem.

As per the coal purchase agreement with Panem, if the shortfall in coal supplies is more than 5% of the required quantity during any month, the PSPCL is to claim liquidated damages (penalty) for the same. But the PSPCL has failed to invoke the clause so far.

When contacted, PSPCL director Surinder Pal said though the stocks were ‘critical’, the PSPCL was managing the situation. “We have got enhanced supplies today (Monday). More stocks are expected in the next two or three days. Though there is coal shortage, we have not shut down any plant so far due to this reason,” he said. On the curtailed supplies by Panem, he said the state government was taking up the matter with the firm and the central government.

Despite repeated attempts, Panem officials could not be contacted for comment.

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