Telangana CM ready for probe into imported coal deal, leaves choice of inquiry to KTR

Telangana Chief Minister A. Revanth Reddy on Thursday said he is prepared to face an inquiry into the decision to import Grade 9 coal for the Yadadri thermal power plant, and offered to leave the choice of investigating agency to Bharat Rashtra Samithi (BRS) working president K.T. Rama Rao. He named the Central Bureau of Investigation (CBI), the Enforcement Directorate (ED) and the Income Tax Department as options for the probe.

Background: Imported coal plan for Yadadri

Responding to a letter from Mr. Rama Rao, Mr. Reddy outlined a series of decisions taken during the previous BRS government regarding coal sourcing for the Yadadri supercritical thermal power project. He said the government then in office had entered into arrangements to import Grade 9 coal and had written to the Railways and the Krishnapatnam Port authorities seeking transportation support for the same.

According to the Chief Minister, a December 9, 2016 agreement was signed with MSTC to import seven million tonnes of coal annually for the Yadadri plant, which requires 14 million tonnes per year. He said the agreement specifically provided for imported Grade 9 coal, and produced documents to support his assertions.

Allegations of sidelining Singareni

Mr. Reddy alleged that the previous dispensation’s arrangements were geared toward gradually eliminating the Singareni Collieries Company Limited (SCCL) from supplying Grade 9 coal to Yadadri, and toward increasing the share of imported coal from 50% to 100% over time. He contended that Singareni, which he said had only about two million tonnes of Grade 9 coal available, was deliberately kept out of 141 coal-related tenders.

The Chief Minister further alleged that the move to rely on imported coal was intended to benefit private interests. He claimed that individuals who had invested money in a newspaper owned by the family of former Chief Minister K. Chandrasekhar Rao stood to gain from the arrangement, stating that Rs. 100 crore had been invested. These claims were presented as allegations by Mr. Reddy.

Regulatory moves and public hearing

Mr. Reddy said the then BRS government had approached the National Green Tribunal (NGT), which, in effect, created a situation in which the entire annual coal requirement of 14 million tonnes for Yadadri would have to be met through imports. He added that the current government conducted a public hearing in 2024, following which a stay was lifted, paving the way for increased reliance on domestic coal.

Cost escalation under scrutiny

Questioning the overall financial management of the Yadadri project, the Chief Minister said an agreement had been signed with Bharat Heavy Electricals Limited (BHEL) for Rs. 17,950 crore. He claimed that the project cost had since risen by an additional Rs. 37,781 crore, amounting to a 110% escalation in estimates.

Generation costs and long-term burden

Comparing power generation costs across plants, Mr. Reddy said electricity was being produced at Rs. 4.62 per unit at Manuguru, Rs. 3.94 at Kothagudem, and Rs. 4.05 at Singareni Units 1 and 2. In contrast, the cost at Yadadri was Rs. 6.60 per unit, which he attributed to the plant’s location away from the Singareni coal belt.

He argued that the higher cost of power from Yadadri would impose an additional financial burden of about Rs. 50,000 crore, with the cumulative impact potentially reaching Rs. 1 lakh crore over a 25-year period.

Operational status and domestic coal supply

The Chief Minister noted that the fifth unit of the Yadadri thermal power plant is yet to be completed. In the meantime, he said, the government has begun supplying coal from the Naini block, with two to three railway rakes being transported daily to sustain power generation at the facility.

Mr. Reddy added that he had spoken to Union Coal Minister G. Kishan Reddy on Thursday to seek support for ensuring that Yadadri can operate entirely on domestic coal.

Probe offer and next steps

Emphasising his readiness for a formal investigation into the imported coal arrangements, Mr. Reddy said he would abide by Mr. Rama Rao’s choice of the investigative body, whether it be the CBI, ED or Income Tax Department. He said documents and correspondence from 2016 onward would be placed before whichever agency is chosen.

Significance

The Chief Minister’s remarks bring the debate over coal sourcing for Telangana’s flagship Yadadri project into sharp focus, combining allegations of policy manipulation and cost escalation with a public call for scrutiny by central agencies. As the state moves to prioritise domestic coal supplies to the plant, the proposed inquiry could determine accountability for past decisions and shape the project’s economics in the years ahead.