Concept of pooling prices of coal against national interest: Patnaik
Strongly opposing introduction of pooling prices of imported coal with domestic coal, the Odisha Chief Minister said it will increase transportation costs and consequently the power tariff which is not in the national interest.
Bhubaneswar: Strongly opposing introduction of pooling prices of imported coal with domestic coal, Odisha Chief Minister Naveen Patnaik on Wednesday said it will increase transportation costs and consequently the power tariff which is not in the national interest.
"The idea of pooling prices of imported and domestic coal should be dropped," Patnaik said in a letter to Prime Minister Manmohan Singh.
Stating that all pit-head power stations having long term power purchase agreements (PPAs) with distribution companies should be run only on domestic coal, Patnaik said they (Power stations) should not procure any coal through e-auction or imported coal for generation up to 85 per cent PLF (plant load factor) level.
"As fuel cost is a pass through item, due diligence and cost control by the power generators is of paramount importance. The burden of high cost coal over and above the administered price should not be passed on to consumers," he said.
Therefore, pooling prices of imported coal with domestic coal is not in the greater interest of coal rich states like Odisha as it is not based on any economic justification and thus should not be permitted, Patnaik said.
He said the objective of importing coal is to meet the FSA (fuel supply agreement) commitments by coal supply companies while FSA stipulated the power utilities to pay as per the grade variance of coal.
"Extra cost on account of importing high grade coal should be borne by the coal suppliers since they will get benefit of extra revenue due to improvement in grade," the Chief Minister said.