Power Secy to Coal India: No coal,pay companieshttps://indianexpress.com/article/news-archive/web/power-secy-to-coal-india-no-coal-pay-companies/

Power Secy to Coal India: No coal,pay companies

CIL to cater to power producers has sparked a confrontation between power and coal ministries

The inability of Coal India Ltd (CIL) to cater to power producers has sparked a confrontation between the power and coal ministries,with the power secretary demanding that CIL compensate for the losses of power firms.

In a September 26 letter to Coal Secretary S K Srivastava,Power secretary P Uma Shankar has blamed CIL for hurting power sector investments as financial institutions had been shaken by the coal shortages.

Shankar’s views follow a move by CIL’s independent directors to block the import of coal and their sale at a discount to power producers as suggested by the Central Electricity Authority.

Power producers had made investments after coal supplies were approved by the Coal Ministry and assurance letters issued by CIL,Shankar wrote in his letter.


“CIL has failed to honour its binding obligation,thus leaving such assets stranded,threatening not only their viability,but likely to make them non-performing assets,” he has written.

Shankar has also slammed the CIL board for rejecting the suggestion to import coal. “CIL board and its director will do a great service to the nation if they do some soul searching on their responsibility and their commitment to increase production of domestic coal and ensure adequate supply of coal to help the growth of the country and not expose power and banking sectors to the risk of jeopardising all their investments,which is largely public money,” he said.

“In fact,as a responsible corporate entity,CIL should compensate the power producers for the loss suffered by them due to its failure in providing them the promised fuel to run their plants at a viable level. In fact,the PSU has obtained bank guarantees worth hundreds of crores from the power producers to bind them in an offtake agreement… CIL has failed to honour its commitments,” Shankar has said.