CIL ready to renew 5 mt offer to NTPC

04-December-2018

Coal India is ready to renew its 5-million-tonnes offer of additional coal to NTPC, which could not lift any quantity after it was offered the fuel with a 30-day deadline. NTPC executives said transporting the coal was a big hurdle.

“We still want NTPC to lift the 5 million tonnes offered from our fresh stocks so that they can build up inventory during winter, ahead of summer, after which demand for power rises and so does demand for coal from thermal power plants. Increasing supplies at a very short notice is not always possible as railways may not be in a position to increase rake availability overnight,” said a senior Coal India executive.

However, Coal India executives said the company may not be able to keep the offer open for long as the coal that has been made available will deteriorate in quality with time or may catch fire. “Once extracted it needs to be sold,” he said. Huge stack of coal kept in open for long can catch fire, or lose energy content because it absorbs moisture.

NTPC was offered coal after its stocks dipped sharply. It was offered 1.5 mt from Central Coalfields, 0.5 mt from Bharat Coking Coal and 0.5 mt from Northern Coalfields among others.

A senior NTPC executive said the company had to arrange for road transportation of the coal from pit head to railways’ loading facilities. This could cost the company upwards of Rs 300 crore. Being a public sector entity it needed to invite bids from transporters and go through the procedure of selecting successful bidders which generally takes over a month for such a large tender.

“There are area specific transportation issues too. Evacuation of coal from one of the largest coalfields – Amrapali and Magadh, on road can only be done 12 hours during the night due to pollution considerations. A large fleet of trucks leaving the coalfield during night would lead to constriction of roads in the area,” he said.

Source: THE ECONOMIC TIMES