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• Next time someone from Maharashtra Generation Company (Mahagenco) tells you power producers are crippled by scarcity of coal, don’t believe him.The company has not lifted more than 3 lakh tonne of coal allotted to it by Western Coalfields. The stock, in fact, has been lying at the coal producer’s pitheads for the last five months, and, if sources are to be believed, wasting away.That stock, if utilised, could produce 3 lakh megawatt (mw) of electricity for one hour, or 30 crore units of power — the thumb rule is 1 kilo of coal produces 1 unit of power.Not producing that much power amounts to a loss of around `100 crore for Mahagenco — or a third of the company’s net profit for the whole of last fiscal.

• This, when three Mahagenco-owned thermal power stations — Khaparkheda, Paras and Nashik — are left with almost zero coal stock and need immediate attention.The company requires 25 rakes of coal per day, of which seven rakes are supplied directly by Western Coalfields from its mines. It used to procures five rakes a day from the washery circuit — that’s washed coal, sourced from Western Coalfields’ mines, but supplied by washery operators. The rest is met through Mahanadi Coal and South Eastern Coalfield.

• Mahagenco’s contention is that the coal supplied by Western Coalfields is of inferior quality.Interestingly, the power producer started taking coal through the washery circuit in 2004 and the share of procurement through this route amounted to nearly 40% of its total lifting at one point. Then, in July 2011, it abruptly decided to discontinue lifting coal from washeries, citing quality issues and requesting Western Coalfields to supply coal directly. Detailed discussions and plans followed because it called for setting up a completely different supply chain operation, but no firm and unequivocal directions were issued.

• Meanwhile, both Mahagenco and washery operators started blaming Western Coalfields for supplying inferior-quality coal and procurements from the washery circuit stopped.Western Coalfields officials deny the charges.“We are still not clear why Mahagenco is not lifting coal. Apart from Mahagenco, we are currently supplying coal to five different state power generation companies, including Haryana, Gujarat, Karnataka, Uttar Pradesh and Madhya Pradesh, and except Mahagenco, none has ever complained about the quality of coal we supplied to them,” said M K Singh, technical secretary to chairman, Western Coalfields.

• Another official cited an instance when Mahagenco had complained that the coal producer supplies better quality coal to private players through e-auction. “Why didn’t Mahagenco participate in the October tender where we scrapped e-auction and supplied that coal to state utilities? All power utilities participated in the tender except Mahagenco. Haryana Power Generation and Gujarat Power Company participated and got most of the coal despite the fact that their plants are located thousands of kilometres away from our mines while Mahagenco’s plants are just next doors.”

• When contacted, M G Waghmode, director, operations, Mahagenco, admitted that Mahagenco has stopped lifting Western Coalfields coal through the washery circuit due to quality issues.Asked why the company had not applied for arbitration, he said, “The matter between WCL and Mahagenco is pending in the Nagpur civil court.” Meanwhile, Mahagenco’s power production is down to around 500-600 mw a day, according to Ashok Chavan, chief general manager, Mahavitaran. Sources allege the bureaucratic tangle with Western Coalfields over lifting of stock is an orchestrated attempt by the power producer to sever ties with the coal company even if it means shutting down its own plants — in fact, that might just be the plan.

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