Creation of artificial coal crisis to increase import and raise power tariff


Creation of artificial coal crisis to increase import and raise power tariff to benefit monopolist tycoons

Less than six months after the country had faced a power crisis when as many as five states were facing prospects of a blackout as power plants had run out of coal supplies in October 2021, another crisis seems to be building up as only eight days of coal is left with power plants across the country. Naturally loadshedding has occurred in many States causing sufferings to the consumers. Now this news of shortage of coal has already been in public domain. It is a fact that because of intense heat wave sweeping across several parts of the country, the demand for electricity has gone up this year. Now the question is—why did the Central Government not take appropriate preventive measures well in time drawing lesson from the similar energy crisis that occurred in October last? The government officials and ministers are tight-lipped on this question because they do not have even a flimsy excuse to offer. Only the union BJP Power Minister is making contradictory statements about stock of coal—once saying that the storage is sufficient for production for 10 days and then after two days revising the figure to of 24 days. (ABP 18-06-22 and 20-06-22). In fact, the Power Ministry has favoured a proposal of passing on the cost of generating electricity using high-priced imported coal, to consumers—a move which would lead to spiralling electricity bills in the forthcoming days.
The pertinent question is—has this situation arisen for shortage of coal stock in our country in normal course? Facts would say, No. Then, is this an artificial shortage created in the interest of the private power producers to raise the tariff of electricity? The answer is, yes. We all know that in India, near about 66% of total generation of power is dependent on Coal and for which more than 70% coal is supplied by Coal India Ltd. (CIL). In the year 2016, Coal India Ltd, exported coal to Bangladesh after meeting the domestic demand. This year, CIL has produced 15.6% more coal than last year. According to official data of the Coal Ministry, during the same April 2021-January 2022 period, coal import by the power sector had fallen to 22.73 million tons as compared to 39.01 million tons during the corresponding period of last year. Reduction in imports showed that the country had adequate supply of domestic coal, as its output had been record-breaking. In March 2022, Coal India Limited, which is the largest supplier of coal in the country, had said in a statement that 2021-22 has turned out to be a high-performance year for it with a flurry of previous records bettered. But, strangely enough, this increased production is not reaching the Thermal Power Stations, as claimed by the official circles, due to lack of necessary Railway wagons. According to Central Electricity Authority, 453 wagons are required per day to carry coal to the Thermal Power Stations. But, in the last week of April, only 379 wagons were available. Though the number is reportedly increased to 412, still there is a shortfall. What prompts the Railway department to not provide adequate number of wagons? Why is there an obvious lack of co-ordination between the Ministry of Coal and Railways and the Power department entailing the present crisis? In this grim situation, the Union BJP Power Minister has given a direction on 28 April last to both the State-owned power producers as well as the private producers to import coal from abroad to the tune of 22 million tons and 16 million tons, respectively, to meet up the crisis knowing full well that presently the price of imported coal is on the rise. Coal price in the global market is currently 5 times of the Coal India Limited (CIL)-notified coal prices. As per order issued by the Union Ministry of Power, all Thermal Power stations had to issue purchasing order of imported coal by 31 May 2022 and receive delivery in instalments—50% by 30June, 40% by 31 August and rest 10% within 31 October 2022. Notably, most of the private producers like Adani Power (capacity-4600MW) and Tata Power (capacity-4000 MW) have curtailed power generation significantly so that the increased cost of imported coal (mostly by over-invoicing) can be loaded on the retail power tariff to multiply profit. In fact, according to a PTI report, in a high-level meeting chaired by Union BJP Power Minister R K Singh, there was consensus over passing on the higher cost of imported coal to consumers, covering units like Essar’s 1,200-MW Salaya plant and Adani’s 1,980-MW plant at Mundra till December 2022. So it would result in to spiralling electricity bills in the forthcoming days.
In such a situation, the consumers have every right to ask the central government why it allowed this at the cost of the common consumers who are getting pauperized with every passing day? That this artificial hike is triggered not only by enforced import but over and above by over invoicing the cost of imported coal has been indicated by the Directorate of Revenue Intelligence, Government of India as well.
Besides this under the garb of attaining ‘‘Atmanirvarata (self-sufficiency) in coal’’, the BJP-led central government has usurped the surplus reserve of Rs.35, 000 crores of Coal India Ltd. to meet the growing fiscal deficit of Central Budget without utilizing this amount for improving areas of operation and opening of new mines of CIL in time though India has huge coal deposit underneath. Without mining this domestic deposit, prescript of import at a substantially higher cost smacks of ulterior motive.
And this is further corroborated when one looks into where the imported coal is coming from. Again, the name that features is the monopolist Adani conglomerate reportedly very close to the ruling BJP and the Prime minister. Recently, the chairman of Ceylon Electricity Board (CEB) accused Prime Minister Narendra Modi of pressuring the Sri Lankan government over the allotment of a wind power project to the Adani Group and there has been public protest against this allotment. Adani group, it is known to all, had acquired controversial Carmichael coal mine in Australia reportedly with bank financing from India and amidst loud protests from the local people against environment pollution it is slated to cause. Adani conglomerate declared in last December that they were ready to export coal from that mine. Immediately after that, India signed a free trade treaty with the Australian government in April last and import of coal from Australia was made duty free. Last month, Adani group began shipping the first export cargo from there. In March, when the coal crisis erupted, NTPC, India’s largest power generating company (genco) in public sector had issued five tenders for importing 5.75 million mt (metric ton) of coal, and all the contracts went to Adani Enterprises. And now, NTPC, has awarded multiple contracts to import 6.25 million mt of coal to Adani Enterprises at a cumulative value of Rs 8,422 crore. It is reported that NTPC would thus see its fuel cost go up to Rs 7-8 per unit from importing coal as against Rs 2 per unit from buying domestic coal from Coal India (CIL). So, the electricity consumers and their national body, the ‘All India Electricity Consumers’ Association’ (AIECA) has rightfully raised the following demands:
• Do not treat Electricity as a profit-making commodity.
• Stop raising Electricity Tariff on the false ground of so-called coal crisis.
• Enhance domestic production of coal by harnessing domestic deposit and stop depending on import.
• Provide adequate wagons for transportation of coal to the Thermal Power Stations.
• Run all Thermal Power Stations situated close to coal pit on full capacity.
• Central Government must withdraw the directives to the STATE and PRIVATE owned power producers to import 10% Coal mandatorily.

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