Coal import via Adani Group kicks up row in Andhra Pradesh

Visakhapatnam: The reported decision of the State Government to import 7.5 lakh tonnes of coal through Adani Group for the thermal power plants run by APGenco has kicked up a row.

While the Andhra Pradesh Government did not make any announcement on the deal, there is criticism in certain quarters against the decision to finalise the contract by paying a higher amount than the actual cost of domestic coal.

Almost three-times more is being paid by the State Government after earlier attempts to clinch the deal by the Adani Group failed to yield any response, CITU State president Ch Narsinga Rao told Bizz Buzz on Thursday.

He said at a time when the State is undergoing a critical phase with huge debt burden, the decision to source coal through Adani Group at an exorbitant price is highly condemnable. If the deal is finalised, it should be scrapped immediately in public interest, he demanded. He said the group either owns or in partnership with local firms certain coal mines in Australia and Indonesia for several years.

In a letter to Chief Minister Y S Jagan Mohan Reddy, social activist and former IAS officer E A S Sarma said “I understand that APGenco has placed an order for 7.5 lakh tonnes of imported coal for the Damodaram Sanjeevaiah Thermal Power Station (DSTPS) at Krishnapatnam, by selecting the Adani Group as the successful bidder at a quoted price of Rs 13,500 per tonne, which is more than Rs 4,500 per tonne compared to what one should expect for importing coal of a comparable quality in the normal course.”

He said the excess burden on this account would be around Rs 338 crore. “To the best of my understanding, the units at DSTPS are designed to operate on indigenous coal and the use of imported coal could have some impact on its efficiency. In addition, had APGenco been able to obtain adequate supplies of indigenous coal, it would have saved more than Rs 600 crore.”

Sarma felt that there has been a continuing mismanagement on the part of the concerned Central agencies in fulfilling their commitments to produce enough coal and transport it to the generation plants of the States. For example, he pointed out, the Ministry of Coal, instead of enabling Coal India Ltd (CIL) to ramp up coal production from existing and new sites, stripped CIL of its greenfield coal blocks and auctioned them to private companies, some of whom own coal mines overseas. He wanted the State to immediately ask the Centre to bear the additional cost of coal imports.

The former bureaucrat said had CIL been allowed to retain its internal resources fully, without having to divert the same as huge dividends to fill the Centre’s fiscal gap and had CIL been encouraged to develop its greenfield deposits, the present coal crisis would not have arisen. Compounding this has been bottlenecks in railway transportation of coal.

Instead of owning its mismanagement, the Central Ministries have been ordering the State utilities to import coal to a certain minimum extent, in a way creating scope for Indian private companies owning overseas coal mines to exploit the crisis and charging astronomical prices from the hapless State power utilities, he alleged.