Coal shortage cripples non-power sector

New Delhi: Federation of Indian Chambers of Commerce and Industry (FICCI) state council, in its recent letter to the Ministry of Coal, has addressed the issue of the proposed increase in coal rakes for power sector that in turn will deprive the consumers of Non-Regulated Sector (NRS) from getting sufficient coal rakes, ultimately leading to a coal crunch. The council has highlighted a recent decision of Coal India to enhance the rake supplies for power sector to 296 rakes per day. The decision dated December 2, 2021 has been taken in order to increase coal stocks level in power plants to 14 days from current level of around 10 days.

Coal Ministry's move to increase coal rakes for the power sector will deprive captive power plants (CPPs) from coal rakes and will lead to coal crunch for the industrial manufacturers. The months from August to November witnessed the provision of 'Priority Coal Supplies' to the power sector which led to a difficult situation to the non-tegulated sectors (NRS), adversely impacting their operations. The letter further says that in the month of November, 255 out of 272 rakes allocated were supplied to the power sector, while the non-power sector was provided just 17 rakes against their requirement of around 50 rakes per day.

The proposed plan for Dec 2021 also envisages just 26 rakes per day for NRS. The main transportation channel for coal from point of production to consumption is through railway rakes. In the last few months, the supplies meant for Captive Power Producers (CPPs) and industries have been either stopped or significantly curtailed for diversion of these to the power sector, which has led to a perilous situation for other coal-based Power Generators, adversely impacting their industrial operations. Diversion of rakes away from CPPs to the Power Producers (PP) by giving them a higher priority is a discriminatory step.

This will lead to coal shortage for industrial production activities, which will not augur well for the manufacturing supply chain. If the situation persists, it is bound to create a precarious condition for NRS sector which represents some highly power-intensive sectors, leading to an adverse impact on their sustainable industrial operations and by extension, on the economy.