PANEM started disrupting the coal supply to thermal plants in Punjab after coal testing procedure at thermal plants were streamlined following fuel audit conducted by Punjab State Electricity Regulatory Commission (PSERC) through Central Power Research Institute (CPRI).
After fuel audit, PSERC fixed a norm of 150 kCal/kg loss between ‘coal as received’ in the coal yard and ‘coal as fired’ in the boiler.
It may be mentioned that PSPCL used to claim this loss at 900 kCal/Kg. The modus operandi was very simple PANEM used to manipulate the test results in collusion with PSPCL officials. The lower quality coal received at thermal plants was upgraded to next higher category.
Thus by manipulating the coal grades the private player used to make the kill. This process continued for years until PSERC intervened through its fuel audit.
PANEM first threatened PSPCL authorities by disrupting the coal supplies to its thermal plants. Subsequently PANEM approached the Punjab Government and PSPCL authorities about the report of coal quality analysis undertaken at thermal plants claiming that some gross lapse has occurred both in sampling and testing of coal.
PSPCL and PANEM officials discussed these issues in an emergency meeting held on February 14, 2013 where Secretary Power was also present. PANEM officials highlighted the various points leading to financial problems faced by the company.
It was decided in meeting to constitute a six member committee with three members from each side. The committee which held four meetings observed that PANEM is disrupting coal dispatches on the reason that the whole process has become financially unviable. The committee failed to reach any consensus.
However committee recommend Rs.100 per MT over and above the payments being made to PANEM as an interim arrangement in addition to additional charges for coal sizing.
To pressurize further PANEM issued an arbitration notice on May 8, 2013. The arbitration process has already started and a meeting took place subsequently.
PSPCL accepted the recommendations of the committee in view of criticality of situation for continuous supply of coal from captive coal mine after considering the memorandum No. 126 in circulation.
This was subsequently confirmed in Board of Directors meeting held on June 4, 2013 where representatives of Punjab Govt were also present.
A senior PSPCL official said that the pathetic side of the story is that PSERC’S fuel audit saved Rs. 306 crore annually to the people of Punjab on 12.5 million tonne total coal supplied to its three thermal plants in Punjab has been undone through this step taken by PSPCL.