NEW DELHI|KOLKATA: The government on Thursday directed coal companies to supply additional coal to state-owned power generating plants, leaving the private sector unhappy.

The notification issued by coal ministry asked Coal India and Singareni Collieries to make “out of turn coal allotment” to state and central electricity generation companies to help them meet increased power requirement. The order initially triggered panic among private power companies that the 'out of turn' supplies to PSUs might lead to curbing of their coal supplies.

The government on Friday clarified there was no coal shortage and that government-run power generating plants are being offered coal over and above the committed quantities to let them meet the high levels of power demand.
 

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Coal ministry joint secretary Rajesh Kumar Sinha told ET that there was no need for private power companies to panic about coal supply availability as Coal India will meet the contractual obligations. “’Nobody will be preferred over others. Many states had approached us that their power requirements have increased and asked for more coal supply. The phrase out-of-turn coal allotment means state power generating companies can take coal above the annual contracted quantity (ACQ),” Sinha said over phone.

Private power companies, however, questioned the government's decision to give excess coal to only PSU power plants, particularly citing cases where private power plants offer electricity at lesser tariffs.

"Discrimination based on ownership of assets put into question the sanctity of commercial contracts signed by Coal India Ltd. This would lead to more stress for the bankers. This is against the PM’s stated policy of level playing field and Ease of doing business,” Association of Power Producers director general Ashok Khurana said.

“If coal ministry claims that they have more coal than contractual obligation, then excess quantity distribution should not be limited to public sector, it should be given on priority to most efficient plants. So that with same coal we can produce more power. Why discriminate on ownership basis?,” he questioned. Sinha said coal contracts signed with private companies and under the Shakti (Scheme to Harness and Allocate Koyla (Coal) Transparently in India) auction scheme will not be compromised. The state governments have been told to pick up coal from any mode--including rail-cum-road, ropeway -- that is available, he said.

Sinha also said extra coal above the trigger level is being supplied to many private power companies. Trigger level is the minimum level to be supplied by coal companies and to be taken by consumer under a contract.

The coal ministry had last week asked coal companies like Coal India and Singareni Collieries Company to accord high supply priority to state, central and independent power producers till June 30th. Following this, Coal India subsidiary Mahanadi Coalfields issued a notice saying it would not load coal on railway rakes for any non-power consumers including captive power producers.