Date:30/06/2005 URL: http://www.thehindubusinessline.com/2005/06/30/stories/2005063002390700.htm

Back Non-payment of dues — Coal India free to cut supplies to SEBs

Ambarish Mukherjee

New Delhi , June 29

THE Ministry of Power on Wednesday indicated to the Ministry of Coal that Coal India Ltd (CIL) would be free to take appropriate action including cut in coal supplies against the state electricity boards (SEBs) and other power plants that are playing truant in paying dues to CIL.

The decision was conveyed by the Ministry of Power to the Coal Ministry at a high-level meeting between Power Minister, Mr P.M. Sayeed, and Minister for Coal and Mines, Mr Dasari Narayan Rao, here.

Sources said that the Power Ministry has said that CIL is at liberty to take necessary and appropriate measures including regulation of coal supplies to ensure timely payments.

The meeting took stock of each of the 20 thermal power plants that had been running with less than seven days' stocks. The Power Ministry had also indicated that it would need additional amount of coal than indicated earlier to maintain higher plant load factor and it would not be possible to import more than 15 million tonnes of coal during the year because of infrastructural limitations. The planned import was 13.4 million tonnes. So, the additional amount would need to be sourced domestically, Ministry officials said.

Earlier, the Central power generating utilities were given powers under the Montek Singh Ahluwalia Committee recommendations, to regulate electricity supplies in order to recover dues from SEBs, following which the current recovery rate of the power generators have shot up from around 65-70 per cent to over 90 per cent now. SEBs were asked to open L/Cs in favour of the generating utilities, who were given the freedom to encash it if States defaulted in making payments for power they used.

In case of the coal sector, as of now the total outstanding dues of CIL from the SEBs and other utilities such as NTPC, DVC, CESC and others are Rs 3,326.80 crore, of which Rs 2,314.81 crore is undisputed and the remaining Rs 1,011.99 crore is disputed. If CIL is able to implement supply regulation to extract dues from the power generators, it may contribute in bringing down the losses of CIL's loss-making subsidiaries, officials said.

At the meeting it was also decided that the Power Ministry would take up individually with each power plants micro issues such as loading and unloading on their parts, waiting time for railway rakes and other logistical matters so that there are no inadequacies on their part and delays are avoided.