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New UserCoal shortage, procurement woes cost NTPC Rs 11,000 crore in 201016
06 Feb 2017
Government Auditor CAG has found that staterun NTPC shelled out an
additional Rs 6,869.95 crore during 201016 for procuring domestic coal and missed out on
garnering Rs 4,299.80 crore in revenues due to outages at power plants on account of fuel
shortage.
Together, it cost the company close to Rs 11,000 crore during 201016, CAG noted.
"The company incurred additional expenditure of Rs 6,869.95 crore over 201016 in
procurement of domestic coal even as it lost an opportunity to generate revenue of Rs
4,299.80 crore due to full or partial outages of stations on account of shortage of coal,"
Comptroller and Auditor General of India (CAG) stated in its report on NTPC's power plants.
The Performance Audit Report covered fuel management of 13 out of 26 coalbased power stations of NTPC and its Joint Ventures during
the period from April 2010 to March 2016.
As per the report, during 201011 to 201516, 11 out of 13 stations covered, reported a generation loss of 19,546.26 million units with a
potential revenue loss of Rs 4,299.80 crore.Rs 4,299.80 crore.
It said that coal cost constitutes 6070 per cent of the total generation tariff of coalbased power stations and has a significant impact on
the cost of supply of power to consumers.
CAG took up performance audit of fuel management in coal based power stations of NTPC Ltd.
According to the report, the supply of domestic coal to power stations was governed by National Coal Distribution Policy (NCDP) of Coal
Ministry. Domestic coal was supplied to power stations by coal linkages established through Fuel Supply Agreements (FSAs) at prices
fixed by Coal India Ltd (CIL).
However, it said that inadequate coal linkages of power stations, delay in signing of FSAs and intra year shortfall in supplies led to
procurement of coal at prices higher than the notified rates.
Power stations also incurred additional cost by way of performance incentives even for quantities within Annual Contacted Quantity (ACQ)
and on deemed delivered quantities, premium on MoU procurement, eauction etc, it said.
Besides, the power stations paid performance incentives for additional annual supplies even as they suffered generation loss due to intra
year shortfall in coal supply, it added.
CAG observed that though the company has been importing coal since 200506, no comprehensive policy for import of coal was devised
resulting in nonuniform decisions regarding splitting of packages among bidders, qualification requirements, retendering and annulment
of packages.
Imported coal was stored in the same yard along with domestic coal although the former has higher Gross Calorific Value (GCV), which
affected the blending ratio of coal, it said
Besides, CAG found that despite very significant quality difference (GCV difference) between domestic and imported coal, the specific coal
consumption of the power station was not significantly affected by a change in the quantity of imported coal blended.
It also said that instead of ascertaining transit loss of coal (difference between quantity of coal dispatched from the mines and quantity of
coal received by stations) by weighing the railway rakes, an indirect method called 'volumetric method' was used.
Source: ET