Coal Express must be given priority in the use of railway tracks. First, let us get the goods moving; pooling of price can be settled later!
Coal inventory in most of the thermal power plants are running critically low with stocks that may not even last for a week. Some plants are on the verge of closing down, because of lack of supply of coal. In the meantime, the employees' union of Coal India Ltd (CIL) has proposed to observe 18-20th September as "work to rule", demanding return of coal blocks allocated by the government, mainly to private firms and declared "illegal" by the Supreme Court. Final decision on this matter is expected on 9th September, after which, the union may decide on their action.
Already, Mumbai has experienced power outage (though reasons were different), the problem of the lack of coal is looming large in the horizon. According to press reports, Coal India has now started initiating some emergency measures to prevent shutdown of nearly one third of India's thermal power plants, most of whom signed fuel supply agreements (FSAs) with CIL, by collecting the accumulated coal and sending these on priority basis to the critically affected power companies. Instead of wagons, they may authorise the use of even trucks to move the precious coal cargo.
Coal India, it appears, had planned to supply 408 million tonnes of coal to these power companies and due to the inadequate supply wagons; they may experience a shortfall of 30 million tonnes. This is the situation in the case of coal mined in the country itself. There is poor coordination in despatches, as more than 39 million tonnes has piled up and is awaiting "evacuation"!
In a separate development, we take a look at the status of imported coal lying in the ports. According to K Ramabrahmam, President of Vishakapatnam Chamber of Commerce, imported coal is piling up and clearance has not been possible due to the lack of supply of adequate rakes from the Railways. Against the demand of 16 rakes per day, only nine are being made available, resulting in the ships being held at the anchorage, incurring huge demurrage.
The situation is so bad that the Chamber has taken up the issue with Nitin Gadkari, Union Shipping Minister, so that he can push the Railway Ministry to make the urgent supply of rakes to Vishakapatnam port. Or, for that matter, all the ports, where they have such issues with the lack of rake supply!
In order to make imports viable and economical, importers tend to get capesize and panamax vessels for coal imports, but non-supply of wagons would nullify the purpose of such imports!
In the meantime, Power Ministry has proposed a road map, including the pooling of domestic and imported coal prices and have taken up the issue with the Cabinet. If such a proposal is accepted and approved, this may result in power generation cost going up by 23 paise per unit in 2014-15, 17 paise in 2015-16 and 2 paise in 2016-17. These may look nominal, but that may not solve the problems, if the inadequate supply of rakes remains a problem.
What is presently and urgently needed is action to be taken by the Railway Ministry, Coal Ministry and Power Ministry. A Coal Crisis Management Team should be set up to ensure that a Coal Express is started to move the available coal from pit heads and other stock points to power generating units that are in critical state.
This Coal Express must be given priority in the use of railway tracks and actual clearance should be given day in and day out. First, let us get the goods moving; pooling of price can be settled later!
(
AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
