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Coal quality: Power companies take Coal India, subsidiaries to task

State-run coal miner Coal India (CIL) continues to face flak from power developers, both public and private, over its inability to ensure quality of coal supplied as agreed upon under a fuel supply agreement (FSA), due to subversion of the third party sampling mechanism meant to independently ascertain the grade and quality of the coal.

According to the minutes of meeting convened by the Central Electricity Authority (CEA) on the issue last month, power utilities have demanded that the standard operating procedure (SOP) approved by CIL for third-party sampling be amended to ensure the independence of the third party agency and to make the test results binding on the coal companies, as they refuse to acknowledge the results of such agencies on one pretext or the other.

“The area managers of coal companies do not accept analysis results that were not in line with the declared grade. The area managers also stopped dispatches when the analysis results were not in line with the declared grade,” power companies have been recorded as saying in the meeting.

Power companies recounted several occasion of coal company officials ignoring the SOPs (standard operating procedures). For instance, the power companies said that CIL officials did not regularly witness the sample collection process and later ignored analysis results on account of not being party to it.

Although the minutes of the meeting don’t have CIL’s responses to the various charges, a senior company official told FE that power utilities often collect test samples unilaterally, without informing the local coal company officials to be present. Test results based on such samples cannot be accepted by the company as per SOPs, he added.

Further, the utilities levelled charges of interference by coal companies, CIL and its subsidiaries, saying they removed the shale, band, stones and other extraneous materials during the sample preparation, leading to unrepresentative samples and faulty testing results.

The CIL official, however, countered that, saying that coal samples are prepared from various rakes and ground to 1 gram of weight before being sent to the lab. “The fuel supply also has provision for compensation to be paid to the power developers if the stone size in the raw coal dispatch exceeds 250 millimetre in size and thus gives no reason for the companies to complain,” he added.

As part of several recommendation for changes to be made in the SOPs, the utilities said that the power developers testing sample should be divided in three parts where one part should be used for third party agency contracted by the power developers, while the other two should be for testing by the coal company and a referee agency, respectively.

Based on the representation by the power companies, the CEA decided to constitute a committee comprising its own official, along with representative of NTPC, state-owned power utilities and the association of power producers (APP), which represents the independent power producers. The committee has been asked to submit a report on necessary changes needed in the SOPs within a month.

CIL had agreed to the mechanism of third-party samplers last year, whereby power utilities could employ independent entities approved by the CEA to carry out quality checks on the coal sample for gross calorific value, and apart from common adulterants like boulders and rocks.

source: http://www.financialexpress.com