Coal secretary to PowerMin: Ask electricity gencos to clear dues of over R9K crore to CILhttps://indianexpress.com/article/news-archive/web/coal-secretary-to-powermin-ask-electricity-gencos-to-clear-dues-of-over-r9k-crore-to-cil/

Coal secretary to PowerMin: Ask electricity gencos to clear dues of over R9K crore to CIL

The coal ministry has asked the power ministry to ensure disbursement of outstanding dues of over Rs 9,000 crore to Coal India by all power stations.

The coal ministry has asked the power ministry to ensure disbursement of outstanding dues of over Rs 9,000 crore to Coal India by all power stations. NTPC and Coal India have been at loggerheads since the past fortnight over the issue of stoppage of Rs 1,100 crore payment by the power company towards Eastern Coalfields Limited,a CIL subsidiary,for fuel supplied from Rajmahal mines.

NTPC had refused to pay the amount alleging that ECL supplied inferior quality fuel and billed for another grade. Officials of both the PSUs recently came to blows at Rajmahal over the issue of joint sampling of coal quality.

Coal secretary Sanjay Kumar Srivastava in a letter to his power ministry counterpart P Uma Shankar,on Monday,said that refusing to pay is neither a solution to the perceived problem nor is acceptable in a commercial transaction between the two PSUs. Since coal supplies by CIL’s subsidiaries are governed by a legally enforceable fuel supply agreements (FSAs),any dispute should be resolved within the ambit of FSAs. “When there are legally enforceable provisions,why is NTPC stopping payment? It is unfortunate that NTPC started resorting to unilateral deductions from the coal bills and making only part payments,” Srivastava wrote.

He said that total dues from the power stations have mounted to Rs 8,934 crore as on March 31,2013,as against Rs 6,206 crore a year ago. “Total outstanding dues as on April 30 are Rs 9,024 crore. Of these dues around 45 per cent are by the state-run power generating companies (Rs 3,016 crore by NTPC and Rs 833 crore by Damodar Valley Corporation). What is worrying is the steep increase in dues by NTPC from Rs 1,411 crore in March 2012 to Rs 3,016 crore in March this year,” the coal secretary told Uma Shankar.

He argued that the coal ministry convinced CIL to continue supplies to NTPC against ECL’s wishes as curtailment of fuel supplies would have had a severe impact on electricity generation.

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