Coal India supplying stones in guise of fuel, say power producers

With a new union government in place, thermal power producers – particularly the state-owned National Thermal Power Corp (NTPC), India's biggest power producer – have renewed complaints against the quality of coal supplied by Coal India Ltd, another government monopoly.

The power ministry has alleged that stones and boulders are still being despatched even after introduction of third-party sampling. Both the power and coal portfolios are now headed by Piyush Goyal.

Meanwhile there is no amelioration of the coal shortage for power producers, as they remain dependent on day-to-day supplies, resulting in massive power outages across most India states, which are struggling under the pre-monsoon heat wave.

"Supply of excessive stones and boulders especially from BCCL (Bharat Coking Coal Ltd), a Coal India subsidiary, is a matter of concern. It results in high detention of railway rakes and damage to coal handling system of power plants," says a power ministry document, according to PTI.

The mechanism for third party sampling of coal quality, which was introduced in October last year at loading points, could not address the quality issue and so there is a "need to be done at unloading point," the document said.

Sources in Coal India said during sampling of the fuel at the loading point the stones are separated from the coal. During mechanical loading if coal is not free from stones then in the fuel supply agreement there is a provision wherein the CIL has to compensate for supply of stones, they added.

The issue of coal quality last year had resulted in a standoff between the country's largest power producer NTPC and the world's largest coal producer Coal India (CIL).

Last year NTPC had alleged that it was being supplied inferior quality of coal. This was followed by CIL stopping coal supplies to NTPC's plants saying the power major owed huge dues to the coal PSU.

Besides, NTPC had refused to enter into fuel supply pacts with Coal India.

After the government's intervention it was decided that a third-party mechanism would be introduced to check the quality of coal.