President’s directive to coal firms may not help state

A presidential directive to Coal India (CIL) to sign fuel supply agreements (FSAs) with power producers assuring them of at least 80% of the committed coal delivery may not help state-owned power generation company Mahagenco, which is the second largest thermal power producer in the country.

A presidential directive to Coal India (CIL) to sign fuel supply agreements (FSAs) with power producers assuring them of at least 80% of the committed coal delivery may not help state-owned power generation company Mahagenco, which is the second largest thermal power producer in the country.

Mahagenco has close to 8,000 megawatts of thermal generation capacity and it would need at least 45 million metric tonnes (MMT) of coal this financial year.

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On Tuesday, the president issued a directive to CIL to ensure uninterrupted power generation because the power sector has been facing an unforeseen coal crisis these days. Maharashtra's distribution arm Mahavitaran faces a daily shortage of 3500MW and, hence, enforces daily power cuts of between 3 to 12 hours.

However, the required coal may not be delivered by suppliers, top boss of Mahagenco, Subrat Ratho, feels. He said in such a case, the utility will have to buy more expensive imported coal and hence additional costs will have to be borne by the 1.80 crore consumers in Mumbai's eastern suburbs and the rest of Maharashtra.