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ALL INDIA INSTALLED CAPACITY

ALL INDIA INSTALLED CAPACITY

Sunday, November 27, 2011

Fund crunch forces Bengal power utility to return coal block

The Union coal ministry has taken away East Damagoria block from West Bengal Power Development Corporation (WBPDCL) at a time when the company is struggling to source coal. A coal ministry official told FE that the de-allocation was made after the government of West Bengal expressed its inability to develop the block that was allotted to WBPDCL in February 2009.
WBPDCL managing director Krishna Gupta said it was the state government’s decision that the block should be surrendered. “The government of India allotted the block to the state government and the state government transferred it to WBPDCL. So the block was de-allocated as per decisions of the state and the Centre,” Gupta said.
Power department officials said the state didn’t encourage WBPDCL to develop the block since it required huge funds, which the state was unable to bear. WBPDCL was supposed to acquire more than 100 acre and vacate two villages in the Raniganj coalfield area for developing the East Damagoria or Kalyaneswari block. It was also supposed to divert a 132KV line to the coalfield area and also build a road from there to link it to NH2, but nothing has been done since February 2009.
WBPDCL officials said the block had a 30-million-tonne reserve of coking coal, which was not useful to the power company. The government has asked the coal ministry to allot another block in Raniganj area but there has been no development on that as of yet.
WBPDCL is suffering from acute shortage of coal and is maintaining a stock of one to two days only at present. Generally, stocks below of 15 days are termed as critical stock position.
To run in full capacity, WBPDCL requires 55,000 tonne of coal per day but it uses around 50,000- 51,000 tonne per day, officials said. But sourcing that quantity has become difficult these days since ECL has stopped supplies due to non-payment of R600 crore. Besides, the tender it floated in October for importing 3 million tonne of coal over a period of three years has not received any response.
So a captive coal block could have helped the company, but the it is not in a position to make any investment nor is the state government willing to help.
A finance department official said the government instead of surrendering the block could have transferred it to West Bengal State Mineral Development & Trading Agency, which by selling coking coal could have helped the government in getting additional revenue.
According to finance department estimates, the state run power sector would post a loss of R2,400 crore in 2011-2012 against a profit of R400 crore in 2010-2011.

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