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Subsidising coal imports should not be at CIL's cost: Rao

New Delhi, Nov 28, 2012, (PTI) :

Coal India Ltd (CIL) today said it has no objection to supply of subsidised imported coal to a certain set of power generators under price pooling proposal, provided it does not involve any revenue loss for the PSU coal miner.

"As far as we are concerned, it should be revenue neutral to us. To rob Peter to pay Paul - I have no problem if you are paying some subsidy to somebody, you call it subsidy or discount, whatever you call, that money should come from others, not from me. Coal India's position is clear," CIL Chairman S Narsing Rao told PTI in an interview.

The Ministry of Power and the Central Electricity Authority have mooted a proposal under which CIL imports coal to fulfil its fuel supply obligations. According to them, the price of imported fuel under pooling mechanism should be based on heating value of domestic coal.

"The burden of supplying imported coal to power stations at Gross Calorific Value (heating value) parity price of domestic coal is to be loaded on the price of the domestic coal so that there is no revenue loss for CIL," the government said in Lok Sabha yesterday.


Though import of coal was not a solution for Indian power sector and majority of the power plants in the country were designed for indigenous coal, Rao said CIL has no objection to imports if price pooling mechanism is acceptable to all.

"As the proposal stands, we have no problem but provided the consumers are comfortable with that... since the imported coal is more expensive, whoever gets the imported coal as part of my FSA obligation or linkage obligation, they should be given some amount of discount so that ...the additional burden we will spread on everybody else," he said.

However, the proposal being backed by the Planning Commission Deputy Chairman Montek Singh Ahluwalia is facing resistance from several state utilities, including that from West Bengal, which have already expressed reservations on it.

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