Chandigarh, October 18
The imported coal scandal worth several crores of rupees in the Punjab State Electricity Board (PSEB) has similarities with the City Centre scam in Ludhiana. After executing the tenders, placing the order and receiving coal at its plants, the PSEB authorities amended the most crucial part regarding the specifications in the purchase order obviously to accept substandard imported coal at its thermal plants. In the City Centre scam terms and conditions were allegedly altered after the allotment of the bid.

Through a memo (number 887/OSD/CM/c-238 ), the Officer on Special Duty (OSD), Coal Management, attached with the Member (Generation) of the PSEB, informed the private company that supplied the imported coal to the thermal plant at Lehra Mohabbat about the amendments made to the annexure of the purchase order. The memo was sent through fax. This correspondent tried to contact the OSD for the official version on the phone this afternoon but the reply from his office was that he was busy at a board meeting.

The amendments were: for acceptance of coal, the above specifications (given in annexure C) shall be strictly adhered to in respect of parameters where the rejection limit is given except in the case of the hardgrove grindability index (HGI). Coal with a higher HGI can be accepted as the HGI is in no way a deterrent to its use.

Annexure C was part of the purchase order in which 11 specifications were clearly mentioned. These related to the quality of coal, size, the gross calorific value, the country of purchase, the sulphur content, the HGI, the ash fusion temperature, etc. Imported coal with the specifications laid down was to be accepted by the thermal plants concerned from the supplying company. Along with the specifications, the rejection limit was also stated in the case of five specifications.

In fact, the rejection limit was fixed in the case of all specifications which later the PSEB authorities interpreted in a different context for obvious reasons. For instance, under one of the specifications 70 per cent of the coal should have been of the size of 20 mm to 50 mm and 20 per cent 2 mm to 20 mm. The ash fusion temperature should have been a minimum of 1,350 degrees Celsius.

That means that any variation in the quality of the coal in relation to these specifications was to have resulted in the rejection of the coal even though no rejection limit was stated in the purchase order. However, by amending the purchase order, the PSEB made all those specifications irrelevant in which the coal rejection limit was not specified in the rejection limit column. In the case of the HGI the rejection limit was fixed.

Coal with an HGI below 50 or above 55 was not to be accepted in any case as per the purchase order. However, by amending it the authorities introduced the words: coal with a higher HGI can be accepted as a higher HGI is in no way a deterrent to its use. Contradicting the stand taken on higher HGI by the PSEB, experts say that coal with a high or low HGI creates several problems. The risk of fire to coal with a high HGI at the storage point is very high.

"The PSEB authorities have committed scandalous irregularity by amending the specifications in the purchase order after the arrival of coal at its plants. Specifications cannot be changed after opening the tenders, accepting the bids and placing the purchase order," says a PSEB insider.

A question being asked is: Why were 11 technical specifications mentioned in the purchase order if half of these were to be done away with at a later stage on the arrival of the coal?

If amendments were to be made, fresh tenders should have been invited. There was a possibility that many more companies had submitted tenders to supply the coal at far lower prices. Officials in the board say that the authorities had been making amendments at the behest of some politically influential persons.

The sources said that on December 29 last year, when the first rakes of imported coal arrived, the Lehra Mohabbat thermal plant wrote a letter to the PSEB authorities at Patiala. It was stated in the letter (number 6171) that the imported coal was of poor quality. It was difficult to handle it. In the letter a heavy penalty was also proposed. Following this, payment to the coal supplying company was stopped.

However, the same authorities of the Lehra Mohabbat plant on April 4 reversed their earlier observations regarding the quality of coal and recommended the continued use of the imported coal ( letter number 1726, dated April 4, 2006). After this, payment to the company was released, and during this period specifications in the purchase order were also amended.

Another interesting aspect is that the test results of the samples of coal at the loading port in China conform to the specifications mentioned in the purchase order. However, the results were found to be different at the labs of the thermal plants. Following a controversy in this regard, when samples were got tested for verification by the Chief Engineer (Technical Audit and Inspection) from the independent Shri Ram institute in Delhi, the coal was found to be far below the specifications.

Officials of the PSEB are asking why payments were made to the company when questions were raised about the quality of the coal right from the word go. Besides, they ask why the amendment was made to annexure C asking the officers concerned to ignore those specifications in the case of which the rejection limit was not mentioned.