It is reported that Coal India Ltd may suffer losses to the tune of INR 3,000 crore if it implements the proposal for pool pricing mooted by Central Electricity Authority.
Coal India plans to import around 20 million tonnes of coal in 2012-13.
Sources say spread over the next 20 years, even at the current levels of imports and the sale prices, the anticipated losses to Coal India will come to nearly INR 60,000 crore.
This observation has been made by the independent directors of the company. While giving their note of dissent before the Board of Coal India, they said that the company should not agree to CEA proposal, which would result in supplying subsidised imported coal to power companies which is not legal.
The independent directors also wanted their views to be communicated to the Coal Ministry. Coal India has always maintained that it will implement pool pricing only if all stakeholders agree to it.
Mr S Narsing Rao Coal India Chairman and Managing Director said “The Company will not take the burden of even a single rupee on its own balance-sheet. These are parts of discussions and nothing is final. We would write to customers seeking their view also. We are yet to come to any conclusion.”
Mr Rao has informed its board members that due to pool pricing, Coal India will not incur any additional cost and it is only revenue neutral. Coal India would charge 2% of the landed price of imported coal as ‘service charge including applicable taxes and levies from power utilities that are receiving the imported coal. Pool price would come into force if all power utilities agree to the proposal.
CEA has proposed blending up to 20% of the committed coal quantity with imports. This will moderate the sale price of the fuel for both private and public power producers.
According to the New Coal Distribution Policy, Coal India may adjust its overall price when coal is imported to meet the domestic requirement. This means the prices of coal can be increased or decreased depending on cost of imported coal.
However, it does not authorise under-selling of imported coal at half the cost.
Independent directors say that Coal India must have a legislative sanction in case it gives subsidy on coal private to power producers. A mere executive guideline cannot substitute for law.
Source - The Hindu
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