In a major shock to the Punjab State Power Corporation Limited (PSPCL), it paid Rs 24 crore in advance for coal which turned out be largely ash.The quality of coal supplied by M/s Panem during May and June 2014 was particularly poor on account of higher ash content (more than 34%) or lower (less than 4,000 kcal per kg) gross calorific value (GCV).
The low quality was detected during laboratory tests at the Central Institute of Mining and Fuel Research (CIMFR), Dhanbad, Jharkhand. As per the coal purchase agreement (CPA), such coal is labelled as ‘non-conforming’.
Panem has not been supplying coal since September 18. The PSPCL is in a fix to recover excess payments which it has made to the company which operates its Jharkhand-based coal mine.
The PSPCL is desperate not only to get coal supply restored by Panem but also to recover Rs 33 crore paid as advance payments.
Of the total 73 coal rakes supplied by Panem from April to June 2014 to the Rupnagar thermal plant, six were found to be of poor quality/below acceptable level (non-conforming). Similarly, 23 out of 60 rakes supplied to the Lehra Mohabbat plant and one out of 14 rakes supplied to the Bathinda plant were found to be below par in terms of quality norms.
As per the CPA, if non-conforming coal rakes are more than 5% of the total rakes supplied during a quarter, then no payment on account of coal price and freight is to be made by the PSPCL to Panem. As 8% of the rakes at Rupnagar, 38% at Lehra Mohabbat and 7% at Bathinda were found to be non-conforming, so no payment was made to the firm.
Under the CPA provisions, Panem challenged the test results and asked for third-party testing of samples of coal of these non-conforming rakes, even though the testing was done in the presence of Panem representatives.
However, without waiting for the third-party test results, payment of freight of non-conforming rakes to the tune of Rs 24 crore was made to the firm, as approved by the PSPCL management on July 30.
The test results of 53 coal rakes of the Lehra Mohabbat plant were challenged by Panem and sent to the CIMFR for third-party testing, which confirmed that 23 rakes were of poor quality.
Moreover, Rs 20-crore penalty for less supply of coal is to be recovered from Panem.
Despite several attempts, neither the PSPCL chairman-cum-managing director (CMD) nor the director generation could be contacted for comment on the issue.
Coal stocks dwindle
With coal supplier Panem not supplying coal since September 18, the PSPCL is again facing a coal crisis.
At present, the stocks at Lehra Mohabbat, Ropar and Bathinda plants are for five, four and three days, respectively. Already one unit each of Rupnagar and Bathinda plants has been closed due to coal shortage.
meeting held on Tuesday between the PSPCL top brass (CMD and directors) and Panem directors Saughat Upadhya and Purajit remained inconclusive. The power secretary, Punjab, has been apprised by the PSPCL management of the dwindling coal stocks.