Thursday, August 18 2005 12:32 Hrs (IST) - World Time -

New Delhi: India will import about 14 million tonnes of coal this fiscal to bridge the shortfall that power utilities are currently facing.

The inter-ministerial Energy Coordination Committee, headed by Prime Minister Manmohan Singh, yesterday (August 17, 2005) decided to expedite coal imports to the tune of 14 million tonnes in 2005-06 for meeting the shortfall.

"The meeting discussed the situation of coal shortage that power companies are facing and the policy options needed to increase coal supply," PM's Media Advisor Sanjay Baru told reporters after the second meeting of the ECC.

Baru said the Cabinet Secretary has been asked to convene a meeting of the Committee of Secretaries to discuss steps required to increase domestic production including that from captive mining. Any specific policy measures would only be decided after the Committee of Secretaries submits its recommendations, he said.

Against the requirement of 338 million tonnes for power generation, domestic supplies of coal was only 317 million tonnes leaving a gap of 21 million tonnes.

However, India will import 13.45 million tonnes of coal to fill this gap as imported coal is low in ash content and has higher calorific value.

Officials said the increased coal availability will raise power generation by 12 billion units.

The ECC, however, did not consider Cabinet Secretary B K Chaturvedi's proposal for levy of 3-5 per cent cess on domestic coal to make imports viable.

Against the planned imports of 10 million tonnes of coal for power generation, only 4.5 million tonnes was imported in 2004-05 mainly due to high international coal prices.

A cess of 3-5 per cent on cost of domestic coal would have been used to compensate importers of coal for the difference between the price of domestic coal at mine mouth (3.76 dollars per million kilo calories) and imported coal (CIF price of 14 dollars per million kilo calories).

As many as 19 thermal power stations are currently facing coal shortage. This includes state-run National Thermal Power Corp's plants at Talcher, Korba and Ramagundam besides others. NTPC alone will import about 4 million tonnes of coal this fiscal. The rest would be imported by various state electricity boards and private companies like Reliance.

The ECC was set up last month to enable a systemic approach to policy formulation in area of energy planning and security. It will identify key areas for energy policy initiatives so that overall object of economic development of energy security and sufficiency are met.

The ECC has the ministers of finance, power, petroluem, non-conventional energy as well as Planning Commision deputy chairman among others as its members.