The construction of the 12.5-km long merry-go-round (MRG) railway system to connect Mahanadi Coalfield Limited’s (MCL) mines at Kaniha (near Talcher, Odisha) to NTPC’s super thermal power plant (STPP, 3000 MW) located in the area faces an uncertain future. The uncertainty grows with the passing of the new land acquisition bill in Parliament.

The process of acquisition of about 120 acres to be needed for the proposed MGR system started more than five years ago but not over yet. Only 11 acres have been acquired so far. Allegedly with political backing, a large number of squatters occupying the land identified for acquisition refuse to vacate, some of them even after accepting the compensation money at an enhanced rate.

NTPC is paying ex-gratia over and above the compensation amount declared by the State Government. A total of 598 in 11 villages have been identified as eligible for compensation; 323 of them have accepted the money and 114 of them also the ex-gratia amount. The new land law, it is feared, might complicate the process further as there may be demand for higher compensation.

The uncertainty looms large at a time when an early commissioning of the of the proposed MGR has become critical for the power plant. At present, the bulk of the plant’s coal requirement is met from MCL’s Lingaraj mines located 40 kms away. The production in existing Lingaraj mines is set to decline as the reserves are getting depleted. The new mines, if and when opened, will most probably cater to new private power plants being set up in the area. MCL opened mines at Kaniha ostensibly to take care of the requirement of nearby NTPC’s STPP.

But there are several problems. First, the present production at Kaniha is not enough to meet NTPC’s present full requirement of 54,000/55,000 tonnes per day. Second, there being no silos nor any mechanical loading facility at the pithead, the loading capacity is limited. Finally, the present 3.5-km long railway line, a temporary arrangement linking one part of Kaniha mines with the NTPC plant with a few kms of road-bridging, has its own limitations. The proposed MGR, to be complete with silos and mechanical handling facility at the pitheads, therefore is urgently needed.

NTPC has other reasons to worry. Since the concept of linking particular mines with a given power plant has been dispensed with, the coal companies are free to sell the production of a mine to any customer they like. The authorities of NTPC STPP, Kaniha, learn that MCL has signed fuel supply agreement with a private group setting up a power plant in the vicinity. They only hope that the promised supply from the Kaniha mines will be maintained.

Unfortunately, that is not happening now. The coal shortage has been the constant source of concern to the NTPC authorities. The fuel supply agreement presupposes an assured supply of 17.3 million tonnes in 2013-14. The pro-rata target till date is 7.8 mt, of which 6.5 mt has been supplied ,leaving a shortfall of 1.3 mt. As a result, there has been a generation of loss of more than 14 million units. For the past several months, one unit always, and some times two units, each of 500 MW capacity, have to be shut down for want of coal. If MCL is to fulfil the targeted supply for the current fiscal, it has to supply at the rate of 59,000 tonnes per day till March 2014 against the present 35,000 tonnes per day.

Right now, an estimated 20,000 tonnes are supplied from Lingaraj mines and another 15,000 tonnes or so from Kaniha mines every day. East Coast Railway, reportedly at the insistence of MCL, has stopped transporting Talcher coal to NTPC Kaniha from September 6 due to differences over payment issue. Prior to it, ECoR used to transport two to three rakes a day. Earlier, NTPC used to supplement the domestic availability with imported coal routed through Paradip port, about two to three rakes a day. Not any more. New import contract for the current fiscal is yet to be signed, it is learnt.

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