Maharashtra government responsible for power crisis

The state is teetering on the brink of a power breakdown and fingers are being pointed at Coal India Limited (CIL).

But the fact is Maharashtra State Power Generation Company Ltd (MahaGenco) and not CIL is at fault. The crisis is because of poor management and lack of planning by MahaGenco and not because of a shortage or poor quality of coal supplied by CIL subsidiary Western Coalfields Limited (WCL).

Documents in DNA’s possession show that MahaGenco failed to lift coal from WCL’s mines, leading to the shortage. In 2011 alone, MahaGenco has failed to lift about 20 lakh tonnes of contracted coal. While this is the contracted amount, WCL says it could have supplied more coal on demand.

On August 16, 2011, MahaGenco suddenly terminated its contracts with washery operators cleaning coal procured from WCL. This washed coal was used to feed MahaGenco’s power plants. Once the contracts were terminated, the state-run power company could not lift almost 25,000 tonnes a day from WCL. This has resulted in about 13 lakh tonnes of coal not being lifted since August. A source in MahaGenco said, “If we had not terminated these contracts, the shortage in some of the power plants could have been averted. More importantly, we would have got good quality coal.”

Several letters were exchanged between WCL and MahaGenco to immediately restart the washeries, but MahaGenco failed to respond. DNA has a copy of one such letter written in August, in which WCL chairman and managing director DC Garg warns MahaGenco’s managing director that discontinuing the washery contracts would have an adverse impact on its power stations.
Subsequently, MahaGenco asked WCL to supply coal directly to the power stations by road or rail. But a senior WCL official said the company should have been informed in advance that the washeries were being shut and coal would have to be supplied directly to the power stations.

“As a government organisation we cannot tie up fresh transport contracts in such a short time,” the official, who asked not to be named, said. “The process will take at least three months.”

DNA also has a copy of the report on mode-wise lifting of coal for MahaGenco from WCL mines till September. The interpretation of the report: MahaGenco failed to lift around 7 lakh tonnes of allotted coal from the doorstep mines of WCL through captive modes like ropeways and merry-go-round (MGR, a private, dedicated rail line).

MahaGenco has also been blaming the shortage of railway rakes for the crisis. But the WCL report quoted earlier suggests that the railways have delivered more than the amount of coal that they were contracted to transport to MahaGenco’s plants.

On the other hand, in the current financial year till September, the Chandrapur Super Thermal Power Station (CSTPS) has failed to lift 5.80 lakh tonnes of contracted coal from doorstep mines. This quantity was to be supplied by ropeway, MGR and by road.

The coal stock of WCL’s Padmapur mine increased from close to 45,000 tonnes in October 2010 to 200,000 tonnes in October 2011. The mine supplies coal to the CSTPS using the MGR.
The Durgapur mine is being operated on a cost-plus basis with MahaGenco, and the CSTPS was to lift all the coal via ropeway, but it failed to do so here, too.

Months before the crisis gripped the state, WCL’s Garg and other senior officials wrote several letters to MahaGenco regarding its failure to lift coal from these mines. DNA has a copy of some of these letters.

MahaGenco managing director Subrat Ratho has also blamed the poor quality of coal supplied by WCL for the crisis. In a presentation to the media, MahaGenco said rocks and mud had affected the quality of coal, hurting power generation.

The quality of coal supplied to MahaGenco is being determined by joint sampling as agreed upon by MahaGenco and WCL. The price of the coal is determined on the basis of this analysis.

The average useful heat value (UHV) of coal required by MahaGenco as per boiler specifications at power stations is 3056 kcal/kg. In the last three years, WCL has supplied coal with a UHV of more than 3500 kcal/kg, which is better than expected.

Other customers of WCL have told DNA that the quality of coal supplied to them was not bad. “The coal we receive from WCL is better than what we get from other CIL subsidiaries,” said HN Baxi, superintending engineer (fuel) of the Gujarat State Electricity Corporation Limited. His counterpart at the Haryana Power Generation Corporation said, “The coal throughout the year is fine. During monsoon, the coal gets mixed with little dust and water. So we dry it and use it.”

While MahaGenco declared a shortage of coal in the second week of October, a Central Electricity Authority report dated October 9 suggested that all save two of its power plants had at least 10 days’ supply in stock. DNA has a copy of the report.

Of the two power plants where supplies had run low, Kaparkheda TPS was at the most critical stage with just a day’s stock. The nearby Koradi TPS had failed to lift about 75,000 tonnes of coal by ropeway. “Both are close, so this stock could have diverted to Kaparkheda,” the senior WCL official quoted earlier said.
Nagpur-based WCL is MahaGenco’s largest supplier of coal.