Imported coal 10 times costlier for power generators

The government had directed power generators to import 10% of their coal requirement for blending.
Image for representational purpose only.
Image for representational purpose only.

NEW DELHI: State and independent power producers will have to cough up ten times the price of domestic coal to procure imported coal for 10% blending as mandated by the Centre. Government officials told TNIE that the domestic coal costs nearly Rs 1,700 to Rs 2,000 per tonne to the power gencos but the imported produce would cost nearly Rs 17,000 to Rs 20,000 a tonne (after including landing costs).

“The power gencos will have to shell out at least seven to ten times more than the usual costs. Perhaps, this is the reason many states such as Telangana, Tamil Nadu, West Bengal, Chhattisgarh and Jharkhand are reluctant to import. Initially, Uttar Pradesh was also reluctant but it is ready to import now,” said a coal ministry official.

Adani Group, which has emerged as a winner for 2.416 million tonnes of imported coal, has quoted a price of Rs 16,700 a tonne. After adding landing cost to this, power generators would be paying nearly Rs 20,000 a tonne. With the country facing a power crisis due to a coal shortage, the power ministry directed all states and domestic coal-based power generators to import at least 10% of their requirement of coal for blending. In case they failed to comply with the blending rule, their quota (imported coal quota) would be enhanced by 15% for the remaining period.

Also, to stock up on coal and meet the growing coal demand, the government decided to import coal from abroad. The coal ministry assigned Coal India Limited (CIL) to import coal on behalf of the state’s gencos. On June 9, CIL floated its maiden tender to import 2.416 million tonnes of coal and on June 10 it floated two medium-term bids for sourcing 6 million tonnes (MT) of coal from overseas.

“Adani Enterprises Ltd emerged the winner of the 2.416 coal tender while the medium-term tenders were given to Indonesia-based PT Bara Daya Energy consortium to import 7.91 lakh tonnes for supplying to gencos during August and September,” said sources.

Adani has quoted Rs 4,033 crore for the supply of 2.416 million tonnes of coal on a freight-on-road (FOR) basis, while Bara Daya Energi has quoted Rs 4,331 crore for the eastern coast tender and Rs 4,497 crore for the west coast for 3 million tonnes each. For coal to be imported from Adani Group, CIL had already got orders from 7 state gencos and 19 independent power producers. Recently, Uttar Pradesh approved the import of 5.46 lakh tonnes for the months of August and September through CIL, and it will cost the state additional Rs 895 crore.

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