NTPC to explore inland waterways to carry coal to some of its critical power generation plants - Given in to pressure from PMO and shipping ministry

NTPC has finally given in to pressure from Prime Minister's Office (PMO) and shipping ministry, and agreed to explore inland waterways to carry coal to some of its critical power generation plants. The company, top power generator in the country, has asked Inland Waterways Authority of India (IWAI) to arrange for transporting 3 million tonne of imported coal to Farakka and Kahalgaon plants in West Bengal and Bihar, respectively.

The agreement is a result of lengthy negotiations between IWAI and NTPC over the issue, which also saw the latter walking out of the potential deal last month. But consistent pressure from shipping ministry and PMO kept the power producer in the state of uneasiness. The fact that its coal-starved power plants need the fossil fuel to run productively also encouraged NTPC to agree.

However, it shortened the list of plants that would utilise waterway for getting coal. The initial list had also included the plant at Barh in Bihar. The order has been given to IWAI as it is responsible for development of inland waterways.

“NTPC has agreed to give long-term orders to transport imported coal to Farakka and Kahalgaon plants. Out of the total order of 3 million tonnes (mt) per annum, 1 mt will be carried to Farakka and 2 mt to Kahalgaon. A commitment has been made to this effect for 7 years,” IWAI vice chairman Sunil Kumar told.However, the public-sector firm has put a condition that the total delivery cost should be lower than the cost incurred in carrying coal through railways, Kumar added.

A senior official in NTPC said requesting anonymity, “A lot of infrastructure is still to be created in waterways. Therefore the cost is bound to increase and is expected to be higher than what we incur for rail transportation. We have not given order for Barh as the plant is not ready yet”. The company carries 40% of its coal requirement through railways and the balance comes through roadways as the consuming plants are near coalfields.

As per IWAI estimates, NTPC will incur Rs 650 per tonne to transport coal to Farakka either through railways or inland waterways. However, the company will save Rs 235 per tonne if it prefers inland waterways to railways to take the imported coal to Kahalgaon from Paradip port.

Despite differences over cost, the two institutions have decided to start transporting coal from July 2012. According to Central Electricity Authority, Kahalgaon has a critical shortage of coal. It is running with coal enough for less than seven days, against the norm of having at least three-week stocks. Farakka is also operating at 60-70% of its capacity with coal availability being 25% short than required. The two plants contribute more than 12% to the company’s total capacity.