Blackout days to be back, govt can't afford coal

TNN Sep 6, 2011, 06.22am IST

KOLKATA: Brace for regular, or shall we say "rotational", power cuts in the city. West Bengal Power Development Corporation Ltd (WBPDCL) has drawn up a roster for shutting down its three power stations as coal companies have cut down supply to the state agency. They have threatened to reduce it even further unless the Mamata Banerjee government pays up Rs 590 crore in dues immediately.

This roster will be sent to Writers' Buildings soon. But more importantly, WBPDCL's decision will force state power utility West Bengal State Electricity Distribution Company Ltd (WBSEDCL) to prepare its load-shedding schedule because the shortage of coal supply will directly hit power generation.

The ultimatum sounded by WBPDCL has reached Writers' Buildings already, but no respite has been offered by the Mamata Banerjee government as the state finance department has thrown in the towel, saying it can't shell out anything for the moment.

Coal companies have cut down on supply over the past two months because WBPDCL, which is the major power supplier to the state utility, has been unable to pay for the coal. The supply has come down from 18 rakes a day to 10. Things have come to such a head that WBPDCL will now have to shut down the power stations. All five - Kolaghat, Bakreswar, Bandel, Santaldih and Sagardighi thermal power stations - will be shut down during various parts of the day, thus supplying less power every day.

The 'shutdown' roster will directly impact power supply and, in turn, make WBSEDCL draw up its own load-shedding schedule.

Power utilities have been going through an abject funds crunch from the beginning of the current financial year as the state government refused to revise power tariff in accordance with the coal price hike from April 1. This alone has led to a loss of Rs 500 crore for WBSEDCL.

Moreover, chief minister Mamata Banerjee - who recently gave up the power portfolio to Manish Gupta - refused to allow the power utility to apply to West Bengal Electricity Regulatory Commission (WBERC) for the standard annual tariff revision. This would entail another Rs 2,500 crore subsidy for the power utility. But the state finance department, to which the power department has applied for the required subsidy, has already thrown in the towel, saying it doesn't even have anything to spare.

So, brace for acute power cuts like in the 1970s and early-'80s. After becoming a power surplus state by the mid-'80s, West Bengal is now walking backwards on the power front.

CIL, NMDC to join hands to set up coal-to-liquid plant

Priyadarshi Siddhanta

Posted online: Sat Jan 29 2011, 01:12 hrs

New Delhi : Arguing for hedging against extremely volatile global crude prices, two navratna mining giants, Coal India Limited and National Mineral Development Corporation have decided to form a consortium in setting up a Coal To Liquid (CTL) project at an estimated expenditure of nearly Rs 15,000 crore in West Bengal’s Birbhum district.

The move comes close on the heels of a recent visit by Coal Minister Sriprakash Jaiswal and CIL top brass to South Africa, where they saw the positive impact being created by the world’s oldest CTL plant being run by Sasol in the country’s Mpumalanga province. The liquid fuel generated have provided 27 per cent energy security to the African nation. “In a recent letter CIL Chairman Partha S Bhattacharya has offered to partner with NMDC to jointly execute a CTL project in the Deora-Pachami coal block in West Bengal’s Birbhum district,” Jaiswal told The Indian Express. The West Bengal government has sought a minority partnership in the proposed venture, he said.

Accordingly the CIL-NMDC consortium should be given the preferential allocation of the block which has an estimated reserve of 19 billion tonnes of coal, Bhattacharya said and reminded that the steel ministry too has made similar requests to the coal ministry in this connection. “The Sasol experience has clearly demonstrated the relevance of such a large CTL facility in enhancing energy security along with a hedge against extreme volatility of global oil prices. It would also lead to industrial rejuvenation of the eastern part of the country known for its industrial backwardness,” Bhattacharjee argued in his letter justifying the project.

Poland interested in modernization of West Bengal coal mines

New Delhi,Wednesday, 04 Nov 2009: Economic Times reported that Poland is keen to strengthen its business partnership and cultural ties with India. It is interested to participate in India’s drive towards modernizing coal mines and defense sectors where the private sector has been roped in as an important partner. The embassy in Delhi wishes to play facilitator in forging JVs between Indian and Polish companies.

Mr Piotr Klodkowski Poland’s ambassador to India said that Poland, with its expertise in developing underground coal mines through the longwall technology, construction of washery, mine safety and rescue measures can be an effective partner of India in developing coal mines with modern technology.

The Polish ambassador said that "As there is huge scope for improvement in the coal mining sector in West Bengal, which is one of the major coal producing state in India, Poland is keen to share its expertise in this field if it is asked for this by the state government. This will be conveyed to the state chief minister Mr Buddhadeb Bhattacharya who I would meet on Wednesday.”

CIL to buy equipment worth $2 bn in 5 years

KOLKATA, 17th October, 2009: Coal India (CIL) will procure spares and equipment worth $2 billion from the overseas market in the next five years. This will mainly be procured to beef up production levels by 175 million tonne, and take up at least 134 greenfield mining projects.

Confirming the development, CIL chairman Partha S Bhattacharyya said: “We intend to increase production capacity by as much as 35 mt every year over the next five years. This will require sourcing equipment from overseas — equipment that is not manufactured in India. The cumulative value is expected to be about $2 billion over the next five years.”

Going by the target, CIL is slated to touch a total production level of 570 mt by the end of the next five years. “To achieve this, we have to source high capacity open cast mining equipment, including high capacity dumpers, shovels and dredgers for mines. All these are not manufactured in the domestic market. A part of the procurement will also go into replacing existing old equipment,” said a senior CIL official.

Incidentally, CIL’s effort to take over the ailing Durgapur-based Mining and Allied Machineries Corporation (MAMC) is yet to fructify. The proposal was taken up to start manufacturing underground mining equipment at the plant since there are no established makers as on date. Once, MAMC’s debts are waived by the Centre, CIL and its partners, including Damodar Valley Corporation (DVC), will be able to manufacture open cast mining equipment, too.

“It will help substitute imported equipment for both open cast as well as underground mines. However, we are still waiting for the government’s clearance,” said NC Jha, director technical at CIL. “Since MAMC is a BIFR case, the joint takeover proposal by BEML, CIL and DVC to take over the firm will now have to be passed by the high court, following which needs to be cleared by the Cabinet. BEML intends to take 48% in the company, while CIL and DVC will take 26% each,” said a CIL official. Incidentally, MAMC owed the West Bengal government about Rs 100 crore, which has already been waived. Central dues stand at about Rs 1,200 crore, and will require a Cabinet clearance.

Govt pays extra for coals extracted from its own mines

Kolkata,10 January: The West Bengal government is paying 134 per cent extra on coal extracted from its own mines, which has resulted into a higher cost of power supply in the state. Instead of retaining the mine rights of Tara East and Tara West blocks of coal mines that the Centre had given to the state government in 1996, the latter chose to rope in Eastern Mineral and Trading Agency (EMTA), which formed a joint venture company, Bengal EMTA Coal Mines Ltd, with the state-owned West Bengal Power Development Corporation (WBPDCL) and Durgapur Projects Ltd (DPL).

The decision has come at a hefty loss as the government is losing Rs 530 for each tonne of coal it is supplies to Bakreswar Thermal Power Project. The only consolation is the 15 per cent dividend from the net profit that EMTA gives to its state-owned partners — WBPDCL and DPL. According to an agreement between the state government and the EMTA, the WBPDCL buys coal at a price which is 19.5 per cent less than that of Coal India Limited (CIL) notified price. At present, the notified price of the CIL coal is Rs 1,100 per tonne. So, the price of the EMTA coal works out to be nearly Rs 880 per tonne.

But herein lies the rub. Had the government retained the exclusive rights on the mines and opted for contract mining, the cost of coal, including transportation charges, would not have been more than Rs 350 per tonne at present rates. According to WBPDCL Chairman S Mahapatra, cost of coal accounts for nearly 70 per cent of the total power generation cost. He added the total requirement of the state-owned power generation company is nearly 20 million tonne a year, of which 4 million tonne comes from the Bengal EMTA. Had WBDCL been in a position to acquire this 4 million tonne at Rs 350 per tonne, it would have inevitably lowered the power generation cost, which at present is Rs 2 and translates to Rs 3.35 when distribution cost is added.

State power secretary Sunil Mitra said the government has been thinking of fixing a new rate, but at the same time admitted that the process has not been initiated as yet. According to Mitra, the current price reflects the investments EMTA has made for acquiring the mines, prospecting the blocks, giving relief and creating transport infrastructure. EMTA insiders said the company, still unlisted, had never been clear with its financials, although it has huge plans in power business.