SINGARENI’S COAL PUZZLE

 

BIZ MASALA | INVESTIGATIVE SPECIAL

Production is falling. Contractors are under scrutiny. And Telangana is searching for answers.

How mining delays, historical audit findings and coal-transport challenges raise questions about the state’s fuel-supply strategy

BY MURTHY ASR • BIZ MASALA

Hero image: AI-generated editorial illustration of a coal mine, freight train and thermal power complex; not a documentary photograph.

THE CENTRAL QUESTION

Why did SCCL’s production fall sharply in 2025–26, what do its own records say about contractor and project delays, and has Telangana demonstrated that its coal-supply strategy offers the best value for electricity consumers?

 

The paradox of a coal-producing state

Telangana is home to Singareni Collieries Company Limited (SCCL), an established coal producer. Yet official statistics show production falling to 58 million tonnes in 2025–26 from 69.01 million tonnes in 2024–25—a decline of about 16%.

The answer may not lie in one failure. Mining operations, contractor performance, transport infrastructure, coal quality and power-sector finances can interact. Each calls for a different remedy. Importing coal may address a shortage of a particular grade, but it will not automatically fix delayed mine development or inadequate logistics.

Production and dispatches: two different signals

Source: SCCL official production statistics. Production and dispatches are separate measures; the gap requires stock and movement reconciliation.

Financial year	Production (Mt)	Dispatches (Mt)
2021–22	65.02	65.53
2022–23	67.14	66.69
2023–24	70.02	69.86
2024–25	69.01	65.23
2025–26	58.00	62.07

 

Production fell about 16% in 2025–26, while dispatches fell about 4.8%. This divergence is a lead, not a conclusion: opening and closing stocks, timing, coal grade and other operational factors need to be reconciled.

Section image: AI-generated illustration of overburden removal and heavy equipment; not an actual SCCL site photograph.

1. When contractors become a production constraint

SCCL’s February 2026 performance report recorded coal production of 52.84 million tonnes against a cumulative target of 64.95 million tonnes for April 2025 to February 2026. Contractor-performed overburden removal—the excavation needed to expose coal seams—was also substantially below target.

SCCL performance against cumulative targets through February 2026. Percentages are calculated from company-report figures.

Operational indicator	Target	Actual	Achievement
Coal production	64.95 Mt	52.84 Mt	81.4%
Contractor overburden removal	406.04 million m³	287.33 million m³	70.8%
Total overburden removal	455.04 million m³	331.29 million m³	72.8%

 

The company attributed approximately 76% of the production loss recorded in February to poor performance by some overburden-removal contractors and delays in awarding new contracts. It also cited delayed execution of new projects, shortages of working places and adverse geological or mining conditions.

This does not establish that contractors alone caused the annual decline. It does establish that SCCL itself identified contractor and project delays as major factors in at least one critical month. Were contracts awarded on time? Did contractors deploy adequate equipment? Were penalties and performance obligations enforced? How much production was lost, mine by mine?

Section image: AI-generated illustration of coal logistics and freight transport; not a documentary image of a specific railway or mine.

2. The CAG had already identified weaknesses

The Comptroller and Auditor General’s compliance audit examined SCCL’s overburden-removal, coal-transportation and stowing-material contracts, principally for 2018–19 to 2022–23. It identified ₹251.05 crore in avoidable expenditure associated with deficiencies in safeguards governing equipment deployment and another ₹74.19 crore associated with delayed enforcement of contractual terms.

These are historical audit findings; they do not prove that the same deficiencies caused the 2025–26 production shortfall. The report indicates that SCCL changed a contractual provision relating to equipment deployment for new contracts from August 2023; the precise scope and implementation should be checked against the detailed audit discussion and subsequent contract documents. The next question is whether the change worked, what amounts were recovered, and whether subsequent contracts improved performance.

Important distinction: the ₹251.05 crore and ₹74.19 crore figures are separate CAG findings. They should not be presented as proven current losses or added to other audit amounts without checking their definitions and overlap.

3. Naini: coal reserves are not the same as coal delivered

The Ministry of Coal’s 2025–26 annual report said SCCL’s Naini coal block in Odisha began production in July 2025 and had produced about 80,000 tonnes through December 2025. A later SCCL February 2026 report appears to record cumulative production of approximately 78,000 tonnes against a target of 3.5 million tonnes through February. The figures are not directly consistent on their face: the reporting periods differ, and the later figure is lower than the earlier reported total. The underlying tables, reporting definitions and any revisions must therefore be reconciled before the size of the shortfall is stated definitively.

Even allowing for the need to reconcile those figures, the reported output is far below the stated target and warrants explanation. The available information does not establish that transportation alone was responsible. Mine development, production capacity, coal quality, reporting periods and logistics all need examination. A coal block’s value depends on whether coal can be extracted and delivered reliably at a competitive cost.

Section image: AI-generated editorial illustration of a thermal power complex and coal handling; not a photograph of Yadadri or another named plant.

4. Yadadri and the procurement question

SCCL’s February 2026 report recorded Yadadri Thermal Power Station coal off-take of 41.40 lakh tonnes against a cumulative target of 72.48 lakh tonnes through February—about 57.1% achievement. This is a gap against the recorded target, not proof of an equivalent shortage of fuel at the plant.

The Telangana government has said Yadadri requires G-9 grade coal and that suitable supplies are not readily available from Singareni. That claim should be tested against the plant’s technical specifications, mine-wise grade availability, blending options, actual stocks and transport costs.

If suitable domestic coal is insufficient, procurement from another source may be justified. But the decision should follow a transparent comparison of delivered cost, quality, availability and reliability. A proposal, an approved tender, an awarded contract and an actual shipment are different stages and must not be conflated.

5. The financial dimension

SCCL’s February 2026 report recorded provisional outstanding coal-supply dues attributed to TGGENCO of ₹19,733.71 crore as of 28 February. The report discusses disputed amounts and accounting treatment that require reconciliation. The balance should not be read as entirely overdue, undisputed or immediately recoverable.

The scale of the reported balance nevertheless raises questions about payment discipline, dispute resolution and the financial relationship between the coal supplier and the power utility. The next step is to establish how much is disputed, how much has since been collected, and how the amounts appear in audited financial statements.

What the records establish—and what they do not

Documented lead	What it supports	What it does not prove
Production fell to 58 Mt in FY2025–26	A sharp year-on-year decline	The reason for the entire decline
February report cites contractor and award delays	Operational delays contributed to reported February loss	Contractors alone caused the annual shortfall
CAG identified historical contract weaknesses	Need to examine corrective action	Historical findings caused current events
Naini production was far below target	A major gap between target and output	Transport was the sole cause
Yadadri off-take was below cumulative target	A supply-planning question	An equivalent fuel shortage at the plant
TGGENCO dues were reported outstanding	Need to reconcile payments and disputes	The entire balance is overdue or unrecoverable

 

The questions Telangana should answer

·       Why did SCCL’s production fall in 2025–26, supported by mine-wise data?

·       What action was taken against contractors cited in the February 2026 report?

·       What explains Naini’s production shortfall, and when can it contribute meaningfully to supply?

·       What technical and financial analysis supports the coal-sourcing strategy for Yadadri?

·       What is the current position of coal-supply dues, including collections, disputes and impairments?

·       Have domestic supply, Naini logistics and alternative sourcing been compared on a consistent delivered-cost basis?

Biz Masala’s conclusion

Telangana’s coal problem should not be reduced to a political contest over who is responsible. The more consequential issue is whether mining, transport and electricity-supply systems are working together efficiently—and whether decisions involving public money are supported by transparent, comparable cost calculations.

SCCL’s own reports document missed targets and operational constraints. The CAG’s earlier audit identifies specific weaknesses in contract management and transportation-cost calculations. Naini’s production shortfall and Yadadri’s coal off-take add further questions. These facts do not establish that one problem caused all the others, nor do they prove wrongdoing in any proposed procurement.

The ultimate test is simple: before Telangana commits more public money to securing coal, can it demonstrate what went wrong, what has been corrected, which domestic alternatives are genuinely available, and why the chosen option offers the best value for electricity consumers?

Sources & editorial verification notes

·       SCCL, February 2026 Performance Report — https://scclmines.com/scclnew/arti.asp?rt=174.PDF

·       CAG Telangana, Report No. 4 of 2025 — https://cag.gov.in/ag/telangana/en/audit-report/details/124978

·       CAG full report PDF — https://cag.gov.in/webroot/uploads/download_audit_report/2023/01.-Report-of-the-CAG-on-SPSEs-for-the-period-ended-March-2023-069ca0776bea8b5.94542484.pdf

·       Ministry of Coal, Annual Report 2025–26 — https://coal.nic.in/sites/default/files/2026-02/chap1AnnualReport2026en.pdf

·       SCCL official production statistics — https://scclmines.com/scclnew/performance_production.asp

·       SCCL production reporting portal — https://scclmines.com/scclrep/prodn/default.aspx

·       Telangana government energy review statement — https://www.telangana.gov.in/news/press-releases/2026/09/

Editorial note: Figures are attributed to the cited official records and should be read with their stated reporting periods and definitions. The apparent inconsistency in the Naini production figures is expressly flagged for reconciliation. This story does not allege a scam or establish wrongdoing. Images are AI-generated editorial illustrations, not documentary photographs. The analysis distinguishes reported facts from questions that the public record does not yet resolve.

 

 

BUSINESS. ECONOMICS. THE FORCES BEHIND THE NUMBERS.

MURTHY ASR • EDITORIAL SIGNATURE