Neyveli Lignite needs to develop own coal resources

With adequate cash reserves, it is time NLC management starts to think in terms of developing its own coal resources by expansion through additionally imported, advanced equipment, and generate more power


Press reports show that the Neyveli Lignite Corp (NLC) held its 58th annual general meeting (AGM) in Chennai, when B Surinder Mohan, chairman and managing director explained to shareholders about various projects that were being undertaken by them.


These include projects in Maharashtra, Uttar Pradesh, Telengana, Odisha and Chhattisgarh, apart from its home state of Tamil Nadu. The projects range from 50 MW to 150 MW. He explained that, additionally, NLC is also looking up opportunities for development in acquiring assets abroad, in far off places like Australia, Indonesia and Mozambique.


Even for some of their projects, outside Tamil Nadu, where Neyveli Lignite is actively associated, ironically, they too face the shortage of coal and the imperative need to secure supplies. This would cover obtaining "clearances", as usual. The two major projects in the pipeline are the 1,000 MW plant at Tuticorin and its own plant at Sirkali for 4,000 MW.


In the last couple of days, TV channels have been reporting the precarious inventory conditions of the power plants in the country and almost 58 plants have hardly a weeks' supply. All the assurances that have been given, including the 58 million tonnes of stock pile at various places and pitheads, it would appear, have not come to the rescue. In fact, Coal India has not made any announcement about the action taken to move this coal by a "coal express" to these power generators.


It is a sad commentary on how this apex organisation is working, if at all. After all the "work" done to get the fuel supply agreements (FSAs) from various consumers, what is the net result? We need to hear from someone who is responsible and who can deliver the goods in such trying circumstances.


We now revert back to the work in progress in Neyveli's work in its own backyard.


According to the annual report, the new thermal power plant (2 x 500 MW), sanctioned by the union government in June 2011, is expected to be commissioned by October 2017 and April 2018, ‘as per current status’. It appears that BHEL has been given the contract for steam/ turbo generator package and the balance of the plant has been awarded to Essar Projects. Why not revisit this contract and seek earlier delivery of the equipment?


In the case of the coal block at Pachwara South, in Jharkhand (reserves 279 million tonnes), Central Mine Planning & Design Institute Ltd (CMPDI) is carrying out exploratory drilling. Ministry of Coal had, similarly, given Jilga Barpali in Chhattisgarh (546 mt) and these are in progress. In the case of the joint venture among NLC, Mahanadi Coalfields and Hindalco, the coal mining at Talabira, in Odisha is "awaiting" environmental clearance. Likewise, Bithnock Thermal power project, linked with the coal mine at Bithnok in Rajasthan, environmental clearance can be obtained only after forest clearance, for which, it seems necessary application has been made.


A study of the annual report indicates that, like all other organisations, NLC are also having the stumbling blocks for clearances of one or the other; land acquisition continues to be a problem where owners have been demanding jobs as well. Rehabilitation is very much part of the corporate social responsibility and NLC seems to have a fairly good record in this area.


With adequate cash reserves, it is time NLC management starts to think in terms of developing its own coal resources by expansion through additionally imported, advanced equipment, and generate more power so as to ensure adequate supply not only to Tamil Nadu, but to all other sister states in the South.


Such a move will reduce dependence on power being obtained from the Northern grid, which is now linked to the Southern grid, but will "release" the excess power that could be used elsewhere. For this purpose, if BHEL and other equipment suppliers are unable to bring their delivery forward, it is time NLC starts looking for secondary support sources of supply. Import the equipment, if necessary to avoid years of waiting time for domestic supply, unless other related work is time consuming to complete.


The time frame on all accounts- from conception to completion - must be brought down dramatically.


(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.)

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