Coal mess in Maharashtra

While state agencies fight over the quality of coal supplied to Maharashtra's coal-fired power plants, it is the people who are suffering for no fault of theirs

By Sai Siddhartha N
Published: Saturday 12 July 2014

While state agencies fight over the quality of coal supplied to Maharashtra's coal-fired power plants, it is the people who are suffering for no fault of theirs

On July 9, the National Green Tribunal directed Mahagenco, the Maharashtra state government-owned power producer, to use only beneficiated coal with less than 34 per cent ash content, in accordance with the norms set down by the Ministry of Environment, Forests and Climate Change. Based on a PIL filed in March this year by social activist Ratnadeep Rangari in Nagpur, the tribunal also directed public sector unit, Western Coalfields Ltd. (WCL), to only supply beneficiated coal.

Mahagenco told the tribunal that it was helpless and a victim of WCL’s dominant position. But then, as the tribunal pointed out, Mahagenco had approved the coal quality at the loading point before crying foul. Ash content reports available with the Central Electricity Authority (CEA) show that not one of Mahagenco’s coal-based power plants used coal with less than 35 per cent ash in 2012-13.
Naturally, the respondents indulged in vigorous finger-pointing. Back in 2012, Mahagenco blamed WCL for supplying coal which is two or three grades inferior to the agreed grade as per their Fuel Supply Agreement (FSA) in its petition to the Bombay High Court. Mahagenco says that WCL is abusing its monopoly status and getting away with supplying poor quality coal. It also claimed a loss of more than Rs 1,000 crore every year due to this. WCL immediately denied all charges and, instead, claimed to be supplying “superior quality coal” to Mahagenco. WCL stated that coal was jointly sampled at the loading point with Mahagenco and was found to have only 25 per cent ash. And as the coal was being transported by Mahagenco itself, WCL claimed it had no role in grade slippage during transporting the coal.
In 2013, it asked the court to allow for third party sampling instead of joint sampling, which it claimed was one sided. The Court then asked the Central Institute of Mining and Fuel Research (CIMFR) to conduct sampling.

The sampling belies WCL's claims. CIMFR found that the average ash content in coal was about 45 per cent instead of the claimed 25 per cent. WCL’s coal was sometimes six grades lower than the agreed in the FSA! WCL challenged CIFMR’s report and the methodology followed by the institute. Inexplicably, the court recalled its earlier order for third party sampling, after finding out that Mahagenco spent 1.25 lakh to perform tests which usually cost Rs 2,500. In the end, the verdict in the case came to a naught.

This seems to be another case of two public sector enterprises trying to cover up their inefficiencies. Many power producers have accused WCL and its parent, Coal India Ltd (CIL), of supplying poor quality coal over the years. They point out that in the absence of competition, CIL abuses its monopoly status and forces power plants to accept poor quality coal.

The most helpless player in this mess, however, seems to be the Maharashtra Pollution Control Board (MPCB). It told the tribunal that it had issued a “stern warning” to all of Mahagenco’s plants to follow MoEF’s notification. It is common knowledge that state pollution control boards in India have the power to shut down power plants, but given the acute shortage of power, cannot exercise it. MPCB also stated that it repeatedly directed power plants since 1997 to comply with the environmental norms. Beyond issuing directions, MPCB has done little. It claimed “helplessness” in monitoring coal quality actually being supplied to power plants.

Of course, the only real losers are the people of Maharashtra. In addition to increased tariffs as a result of excess coal consumption, the environmental impact of added air pollution has been huge. Combined with Mahagenco’s creaky power plants, some of which are more than 25 years old, and WCL’s terrible coal, it is clearly a case of the innocent bystander getting shot.

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