Lok Sabha Question No. 756 (UNSTARRED), answered on 2016-04-28
Subject: Agreement for Swapping of Coal
Ministry: COAL
Asked by: CHANDRAKANT RAGHUNATH PATIL

## GOVERNMENT OF INDIA MINISTRY OF COAL LOK SABHA UNSTARRED QUESTION NO.756

## TO BE ANSWERED ON 28.04.2016

## 'Agreement for Swapping of Coal'

## 756. SHRI C.R. PATIL:

Will the Minister of COAL be pleased to state:

- (a)  whether  the  Government  is  aware  about  the  agreement  of  swapping  of  coal  with Gujarat  Government/Gujarat  State  Electricity  Corporation  Ltd.  (GSECL)  with  National Thermal Power Corporation Limited to reduce the burden of transportation cost of fuel;
- (b) if so, whether the Government/Western Coalfields Limited (WCL) would supply the coal  to  GSECL  at  notified  rates  only  and  not  on  cost  plus,  as  the  same  shall  not  be viable to GSECL as cost will increase;

(c)if  so,  the  time-frame  to  allocate  more  coal  from  WCL  to  GSECL  to  cater  to  its requirement at notified rates only;

(d) whether transfer/swapping will be based on heating value terms;

(e) if so, whether the WCL will allow the third party to do the sampling and analysis at loading, if so, the details thereof;

(f) whether  the GSECL's  proposal  of  its consultation before finalization of the specifications of imported  coal and swapping of coal at mine and port site has been agreed to by the WCL/Government; and

(g)if so, the details of  terms and conditions of that agreement?

## ANSWER

## MINISTER OF STATE (I/C) IN THE MINISTRY OF COAL, POWER AND NEW AND RENEWABLE  ENERGY

## (SHRI PIYUSH GOYAL)

(a)to(c): The new Inter-Ministerial Task Force (IMTF) constituted by the Government in June, 2014 has inter-alia, recommended partial shifting of linkages  of about  1.2  Million  Tonne  from  South  Eastern  Coalfields  Limited  (SECL)    to  Western Coalfields Limited ( WCL),  leading to savings in transportation costs of about Rs.100 Crore to Gujarat State Electricity Corporation Ltd (GSECL). Apart from this, swapping of coal between GSECL and National Thermal Power Corporation (NTPC) [Sipat] has also been  implemented.  This  will  result  in  rationalization  of  transportation  of  1.3  million tonnes of coal per annum and lead to potential savings of Rs. 458 Cr. per annum. Linkages from WCL also entail the cost-plus issue, viz. coal from WCL against new linkages  is  not  available  at  notified  price  of  Coal  India  Limited  (CIL).  This  is  on account of viability issues of WCL mines due to high stripping ratio. Existing allocation of  coal  to  GSECL  power  plants  is,  therefore,  according  to  availability  of  coal  in  coal companies and taking into account logistic constraints.WCL had offered a mix of coal from cost - plus sources and notified price sources to GSECL out of transferred quantity of 1.2 Million Tonne from SECL to WCL. (d)to(g): which was  agreed  to. The  detailed terms and  conditions like heating

Regarding  swapping  of  coal  between  GSECL's  domestic  coal  linkage  from Korea - Rewa coalfield of SECL with imported coal of NTPC,the domestic coal against FSA  of  GSECL  from  Korea-Rewa  was  allowed  to  be  used  by  NTPC  for  their  Sipat Thermal Power Station. Only destination change of domestic coal was allowed, keeping all  other  terms  constant,  subject  to  railway  logistics.  Arrangement  with  respect  to imported  coal  was  to  be  on  their  mutual  terms,  subject  to  decision  in  this  regard  by Central Electricity Authority(CEA) and Ministry of Power. GSECL later on requested to include Korba Coalfields in addition to Korea Rewa under the swapping arrangements value, specifications  of  imported  coal,  swapping  at  mine  and  port  etc.  are  mutually  agreed between NTPC and GSECL.  Coal companies allow third party sampling and analysis at loading end for power utilities.

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