TN coal import scam: TANGEDCO hits back, says NGO's allegations of corruption are false

Arappor Iyakkam had announced that Tamil Nadu has faced a notional loss of over Rs 3,000 crore due to irregularities in the import of coal.

​In response to allegations by Chennai-based anti-corruption NGO Arappor Iyakkam about a coal scam, the Tamil Nadu Generation and Distribution Corporation (TANGEDCO) has released a statement. The corporation has denied irregularities to the tune of Rs 3,000 crore in the import of coal from Indonesia.

Arappor Iyakkam had held a press conference in Chennai on Thursday to announce that Tamil Nadu has faced a notional loss of over Rs 3,000 crore due to irregularities in the import of coal.
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Documents presented by the NGO show that purchase orders mentioned the Gross Calorific Value of coal being imported as 6000 KCal/Kg. But the manner in which the Indonesian government measured the coal was different and the equivalent that was given only came up to a Gross Calorific Value of 5500 Kcal/Kg. In addition to this, shipping costs were allegedly overplayed by making it seem like the coal was coming from one or more intermediary agents based in a third country.
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A statement from TANGEDCO’s Director of (Power) Generation claims that market indices for coal were available only for 5900, 5800 and 5000 GAR and not 5500 GAR. So the prices were apparently adjusted accordingly to the 5604 GAR (6000 ADB) requirement mentioned in the tender.

“It is evident that the allegation that TANGEDCO is procuring 6000 ADB at the price of 6000 GAR is totally false,” says the statement from TANGEDCO.
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It further denied procuring lower grade coal at higher grade price.
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“It is wrong to state that lower grade coal is procured at higher grade price, as stated in the news items. The prices finalised by TANGEDCO are compared with Platts index price, Argus index price and with prices finalised by other power utilities, after giving due weightage to ADB value or GAR value, as the case may be, total moisture, and sulphur parameters,” their statement reads.

TANGEDCO claims that tests conducted by the Central Power Research Institute on samples of the procured coal found it was “not of lower grade”.

They also do not elaborate how the price adjustment is carried out.
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Arappor Iyakkam sees the statement as an admission of guilt by TANGEDCO.
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In a tweet on Saturday night, its convener Jayaram Venkatesan said, “TANGEDCO by trying to rebut the scam have actually accepted it! They have accepted that its 5604 GAR which is exactly in between the 5500 kcal and 5700 kcal scenarios we considered.”