Dispute over dues restrains CIL from regulating supplyhttps://indianexpress.com/article/business/business-others/dispute-over-dues-restrains-cil-from-regulating-supply-5145678/

Dispute over dues restrains CIL from regulating supply

Coal supply to the state/Central gencos may be regulated corresponding to the current payment, if undisputed outstanding dues are more than 90 days equivalent coal values.

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Firms with dues of Rs 9,426 crore have raised dispute on most of amount. (Express File Photo: Partha Paul)

On January 25 this year, the Central government decided that Coal India Ltd (CIL) “may” regulate coal supply to the public sector power-generating companies that do not pay “undisputed” dues within 90 days. The Indian Express has learnt that the power companies, which have dues of Rs 9,426 crore with CIL as on March 31, have raised disputes on most of the amount. Ultimately, CIL has not yet regulated the coal supply because of such disputes.

“We just had a meeting with all such public sector power companies on April 12. We have told the companies that in case you have any such dispute, which we can’t resolve between us, you should take it to the coal ministry’s ADRM (additional dispute resolution mechanism) committee where a decision can be taken. We have also told them that if the dispute can be resolved between us, let us liquidate (resolve) it as soon as possible,” said a senior CIL official on the condition of anonymity, adding that “we have told them before, too, about taking the matters to ADRM, and we just repeated the same to them in the April 12 meeting.”

The January 25 meeting was chaired by Union Power Minister R K Singh to review the coal supply situation across the country. At the meeting, CIL raised the issue of outstanding dues and stated that power plants should be impressed upon to clear their dues at the earliest. The minutes of the meeting state: “As per FSA (fuel supply agreement), CIL supplies coal to the power sector on the cash-and-carry basis, however, coal supply to states/Central gencos (generation companies) is not regulated due to intermittent payment constraints. It was decided that coal supply to the state/Central gencos may be regulated corresponding to the current payment, if undisputed outstanding dues are more than 90 days equivalent coal values.”

Private power companies are not supplied coal without advance payment. Therefore, the dues of Rs 9,426 crore are of public sector power gencos, which are owned by the Central government or various state governments. According to a senior government official, a joint secretary at the Ministry of Coal co-chairs the ADRM committee. Also, the Principal Secretary of Energy Department of that particular state — from where the power generation company belongs to — is also present at this ADRM. Once a decision is taken at the ADRM, the companies have to implement it.


“We have not able to regulate coal supply as of now because the power generating companies have been raising disputes. For example, if we send them a bill of Rs 500 crore to be paid, the company tells us that the amount is just of Rs 200 crore because the coal was of low quality … If we say that the 90-day period is over, the company comes to us and says that no, the period is not over. That is why we have told them that such issues — which can’t be resolved bilaterally — should be taken to ADRM,” the CIL official added.

The official said that he won’t be able to give a clear information about the exact amount on which dispute is raised because that is also not decided as yet among both the parties. However, he added that CIL has been sending notices every month to power PSUs so as to get payments on the dues. CIL did not respond to the queries sent by The Indian Express.