Karnataka to import coal at higher cost with eye on polls

Government to invite global tenders

Karnataka to import coal at higher cost with eye on polls

The State government is quietly initiating steps to import coal to ensure adequate power supply during  coming summer, when the crucial Assembly election is due.

The Karnataka Power Corporation Ltd (KPCL) will soon float a global tender to import one million tonnes coal, to create a buffer and ensure that all its thermal plants – especially Raichur Thermal Power Station (RTPS) and Ballari Thermal Power Station (BTPS) – run to their full capacity in the summer months.

P Ravi Kumar, Additional Chief Secretary, Energy department said the tendering process is being initiated early as a precautionary measure. It takes at least three months for finalising the tender and another month for the supply. The state government also requires to seek the Centre’s nod for importing coal.

Official sources in KPCL said the first shipment of coal will reach the State by March. Countries like Indonesia, China and South Africa are the key players in the non-coking coal market, and the lowest bidder will be awarded the tender. Karnataka spends around Rs 8,000 crore annually on feeding coal to RTPS and BTPS. While domestic coal costs around Rs 4,000 a tonne, imported coal is priced around Rs 5,500 a tonne.

Coal supply has been badly hit across the country, forcing the states, including Karnataka, to look at alternatives. The state is unable to lift its coal reserves in Maharashtra due to a pending legal dispute in the Supreme Court.

“We will not lose focus on the Coal India Ltd (CIL) production. But it is ideal to have a backup plan. The demand for power, especially from the agriculture sector and urban areas, has slowly started increasing as the rains have stopped. It is a norm to have at least one month’s stock of coal at the thermal plants.

However, we don’t want to  risk shortages during summer,” the sources said.

The demand for power, which was hovering between 140 to 150 MU till recently, is expected to cross 220 MU in the coming weeks. Currently, both BTPS and RTPS have a coal reserve of 15,000 tonnes each. This will not meet even one day’s requirement. While the everyday requirement of coal in RTPS (for 8 units) is around 28,000 tonnes, BTPS requires around 15,000 tonnes a day for operating two units.

* State to import coal with an eye on polls.

* Plans to ensure adequate generation and supply of power during summer months, when polls are likely to be held.

* Plan is to import 1 million tonnes of coal

* Currently, the state is facing severe shortage of coal.

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