Coal news and updates

CESC prunes expenditure on new T&D projects to meet coal levy

January 1: Kolkata-based CESC Ltd has decided to curtail expenditure on new transmission and distribution (T&D) projects to save on costs and meet the obligatory payment of Rs 990 crore imposed as levy payable to the government for extraction of coal from its captive coal block.

“The company is cutting down expenditure on new T&D projects such as laying new lines or installation of transformers. This is part of efforts to make provision for the payment of levy as directed by the apex court,” a company official said.

Earlier, the RP-Sanjiv Goenka Group flagship had challenged the Coal Mines (Special Provision) Ordinance, 2014, providing for retrospective recovery of a levy of Rs 295 per ton of extracted coal and linking its payment as a qualification to participate in the cancelled coal blocks' auction.

The company had further made an appeal that it was not in a position to pay the liability of Rs 990 crore imposed in the form of the levy. However, a bench comprising of Justice Madan B. Lokur, Justice Kurian Joseph and Justice A.K.Sikri rejected the plea on December 18, 2014.

Commenting on the development, the official said the cost-cutting measures adopted by the company would “not impact existing customers,” but may affect new T&D projects.

CESC has a producing coal block at Sarisathali near Asansol which reportedly supplied about 50% of the total coal requirement of CESC’s thermal power plants.