Wide disparity in coal production and its despatch has resulted in mounting pit head stocks for coal producers. For example, the coal despatch by Coal India Limited (CIL) and Singareni Collieries Company Limited (SCCL) to power utilities during the first half of April 2014 has been lower than the coal production during the period. While the coal despatch by CIL and SCCL was 16.208 million tonnes (MT), the total coal production during the period was higher at 22.007 MT.

One of the main reasons attributed for this disparity is the confiscation of trucks meant for transporting coal and diverting them for election purposes. However, private power producers do not agree with this argument saying that pit head stock was piling up even before election duty commenced. According to them as of February 2014, a pit-head stock of more than 40 million tonne of coal had piled up at Coal India Limited (CIL) mines. Their argument is that the low off-take situation has arisen due to the inefficient generating stations of the state utilities where the variable cost is extremely high forcing power developers to back down generation. At the same time private sector plants which are relatively newer and more efficient are forced to operate at sub-optimal levels even as older state power utilities back out.

Private power utilities say that there is an urgent need to correct the prevailing anomaly in Fuel Supply Agreements. Presently, there are many power stations with excess coal stock but it is not possible to transfer coal between plants due to provisions of the FSAs signed between power utilities and coal companies. According to the latest available information, the Sub-group constituted to look into the issues of critical power houses is exploring the feasibility of flexibility in FSAs and redistribution of coal surrendered by power plants on a short term MoU basis.


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