“Providing for working capital from internal resources may be difficult. Coal India is a zero-debt company, however, we will have to borrow funds from the market thereby increasing production cost if dues continue to mount,” a Coal India executive told ET.
He said dues of Rs 2,000 crore in 15 days were unprecedented. Almost 80% of the company’s output goes to power plants, and the biggest dues were from state-owned power firms in West Bengal, Tamil Nadu and Uttar Pradesh.
Coal India is continuing supply to state power firms despite default, as advised by the government, to give states some respite from the ongoing liquidity crisis. Distribution companies are not paying power generators, which makes them unable to pay for coal.
Coal India’s sales are also down. About 40 power plants in a few states, including Haryana, Punjab and Rajasthan, have stopped lifting coal either because they have enough stocks, or to reduce inventory cost.
Subsidiary, Central Coalfields is the worst hit. Almost all its power sector consumers are refusing to accept supplies and make payments.
Deferred payment from state-owned generators and refusal to lift coal by others have hit the company’s daily sales collections. Last year, daily collection hovered around Rs 250 crore a day while daily expenditure along with statutory payments was around Rs 210 crore. Collections have dwindled while expenditures remain more or less the same.
