Ministries clash over issue of coal import

The ministries of power and coal are at loggerheads on the issue of import of coal by Coal India Ltd for private sector companies.

While the ministry of coal has accused the ministry of power of mooting policies that will harm the interests of the PSU Coal India, the ministry of power is defending its policies in the garb of larger interest of the country and power secretary, Uma Shankar has asked the CIL board and its directors to ‘do some soul searching on their responsibility and commitment’.

In a letter, SK Srivastava, secretary coal has lambasted the ministry of power for mooting the proposal in which Coal India is required to import 20 mt of coal for the Independent Prower Producers. The proposal will cost the Coal India a whopping Rs3,000 crore in 2012-12 itself. Over a period of 20 years, these losses would amount to Rs60,000 crore at the current level.

“We do not think it is in the financial interest of CIL to go for risky business of importing coal when it has hardly any experience simply to induce whopping losses of Rs60,000 crore,” said a letter written by Srivastava quoting the notes of the independent directors of the CIL.

The ministry of power has been pressurising the ministry of coal through the prime minister’s office to sign fuel supply agreements with the power producers with a penalty clause if the PSU did not meet 80% of the fuel requirement of the power plants.

However, the board members of Coal India have consistently refused to sign any contract based on the penalty clause as it will harm the company’s finances in the wake of shortage of coal.