Coal news and updates

The cost of the deadlock between NTPC and Coal India (CIL) over  the quality of coal being supplied under the gross calorific value (GCV) price band has reached Rs 4,000 crore, as NTPC continues to pay less than the actual amount of the generated invoice by the coal company.

 

“ NTPC owes us around Rs 4,000 crore as the issue will be resolved only when the third party evaluation of coal starts,”said S Narsing Rao, CMD of CIL.

 

Rao believes that NTPC will make full payment once the third party sampling of coal begins later this year.

 

CIL supplies coal worth `60 crore per day to NTPC.

 

CIL and NTPC have been fighting over the quality of coal supplied from the Rajmahal coal mine of Eastern Coalfields (ECL), a subsidiary of CIL, since October 2012.

 

ECL supplies 14.5 million tonne annually to NTPC facilities at Farakka (2,100 mw) in West Bengal and Kahalgaon (1,340 mw) in Bihar, from Rajmahal.

 

CIL had shifted to a new pricing mechanism based on GCV in 2012. According to the GCV system, price of coal is linked to its calorific value. 

 

NTPC  has been complaining about that while it is being supplied coal having a calorific value of 3,500 kilocalorie per kg, it is being billed for fuel of 4,500 

kilocalorie per kg to 5,000 kilocalorie per kg.

 

NTPC has always maintained  that it has been making  payments to CIL on the basis of the calorific value of the coal supplied for its power plants.

 

Earlier this year, ECL had even restricted supply of coal to NTPC after the power generator refused to pay the full amount of the invoice generated for the supply of coal under the GCV price band.

 

Coal minister Prakash Jaiswal had to intervene to resume fuel supplies to NTPC.

 

Meantime, CIL will on Wednesday sign new supply agreements with NTPC Ltd, its top customer.

 

 

 

Source: Daily News and Analysis