The Ministry of Power has issued a stern warning to the sellers of coal and asked them not to hike the coal prices even if demand rises.

In a circular, the Ministry has said that both procurers and sellers are legally bound by the PPA signed by both parties.

While the procurers are bound to pay the bills timely as per the PPA, the Gencos (sellers) are bound to maintain adequate fuel stocks and offer availability as per the PPA. Not maintaining adequate fuel stocks or not giving availability on any pretext such as the high price of imported coal etc is inexcusable, the circular warned.

The Ministry of Power has also taken the decision that the domestic coal supply to all Gencos will be in proportion to the coal received from CIL/SCCL for all the Gencos.  “Moreover it will not be possible to give more coal other than on a proportionate basis to make up any shortfall, the Ministry communicated to the Gencos,” the ministry circular said.

The Ministry of Power has been monitoring the coal supply situation in the country and has been taking steps to ensure adequate coal supply and coal stocks based on the domestic coal received from Coal India Limited (CIL), Singareni Collieries Company Limited (SCCL) and Captive coal mines.

In the wake of impending summer when the coal demand shoots up, the Ministry of Power has issued circular numerating actions to be taken on priority to enhance the supply of domestic coal. In the circular, the Ministry has made it clear that the Production in captive coal mines allotted to power plants may be maximized to the limit permitted.

It has taken strong exception to the fact that several power plants are taking much longer time than the prescribed norms in unloading coal from railway rakes which are affecting the turn-around time.

It has asked CEA to monitor the unloading time at power plants and it has been decided that a lesser number of rakes would be made available to such power plants where there is slackness in prompt unloading of coal from rakes. This step has been taken to maximize the utilization of available railway rakes.

The Ministry circular has noted that several generating companies have overdue running in several hundred crores of rupees. Such huge overdue amounts affect the ability of coal companies to continue coal supply. 

Therefore, the Ministry of Power is of the view that the bills of coal companies must be paid in due time so that coal supplies to such generating companies are not affected on this account.

It has been observed that the non-operation of certain Imported Coal Based (ICB) plants in States had put more pressure on domestic coal demand leading to low coal stocks for domestic coal-based (DCB) plants.