Gandhinagar, 30 September 2014

Agreement for swapping of coal was signed between GSECL and NTPC today in presence of Power minister Saurabh Patel, NTPC director Mishra, executive director Deshpande, GSEC MD Gurudip Singh among others.

Details

Most of the power companies are supplied coal by central government run Coal India Limited. With this every company has to import 10-15% coal as per the decision of central government.

Coal imported by NTPC land at Mundra port and transported to power stations in Chhattisgarh, while Gujarat is supplied coal from Koria Reva coal field which is located 1300 km away.

For swapping of coal to save transportation burden, Gujarat government had raised the issue in conference of Power ministers on 23 June 2009, 28 April 2010, 25 September 2010, 13 July 2011 and 13 February 2013, but central government just didn’t take decision for some reason.

Now the Narendra Modi led government has granted permission which would save Rs. 900 crore transportation cost, benefit of which will be passed to end consumer.

Minister Saurabh Patel explains it:

This idea emerged in year 2009. NTPC imports coal on coasts of Gujarat and take it to Chhattisgarh. We bring coal from Chhattisgarh to Gujarat. So both NTPC and Gujarat companies spend huge amount for transportation. Since 2008 we told UPA government that you allow swapping of coal. But there was no decision. The new government in centre has immediately approved and accepted our idea, and today coal swapping agreement of 1 million tonne per year which can reach up to 2.5 million tonne per year has been signed between GSEC and NTPC. Rs. 378 crore will be saved, and when full contract of 2.5 million will be executed, the total saving will be around Rs. 900 crore. For example GSEC procures coal from Korea which costs on an average Rs. 2035 per mt. Now this company will procure NTPC’s imported coal which shall cost Rs. 630 per mt. Sameway NTPC will have to spend Rs. 342 instead of present spending of Rs. 2710. So saving for Gujarat govt company will be about Rs 1400 per mt, saving for NTPC will be Rs. 2000 per mt. Benefits gained every three month will be passed on to consumers.

More on this

Power and Coal Minister Piyush Goyal has approved this arrangement proposed by the state. Country’s largest power producer NTPC operates 2 projects — Korba (2,600 MW) and Sipat (2,980 MW) — in Chhattisgarh. The total coal requirement of NTPC is estimated to be 177 million tonnes, of which the company will import 17 MT. During 2013-14, NTPC consumed 158.57 MT coal, with imports accounting for 10.39 MT. Chhattisgarh has 16 per cent of the total coal deposits of India. The 12 coalfields, in the districts of Raigarh, Surguja, Koriya and Korba, have estimated reserves of 44,483 MT. Most of the coal deposits are of power grade coal. The total installed power capacity of Gujarat is 27,647 MW.

Gujarat government had also asked the central government to deliberate on the issue of coal quality, pricing of coal and freight cost during the meeting represented by minister Saurabh Patel in June.