NTPC pays dues, ends conflict with Coal India

KOLKATA: State-run power producer NTPC has settled the dues of two Coal India subsidiaries, bringing to a close a protracted tussle over quality of fuel the state-run miner was providing.
"Dues at Eastern Coalfields and Bharat Coking Coal have been settled. Officials from NTPC and CIL agreed on the quantum of the dues and NTPC has made the payment," a senior Coal India executive said, adding that dues of the other subsidiaries were likely to be cleared in a fortnight. As on March 23, NTPC owed Coal India Rs 3,000 crore.

The dues have now come down to aboutRs 2,000 crore. Earlier, the finance ministry had advised both companies to arrive at a price based on the average quality of coal supplied by Coal India’s subsidiaries. The miner had initially rejected the proposal, saying it would violate the terms of the contract signed with NTPC, but later agreed after executives of the two companies met.

"Settling dues for coal supplied from mines where third party sampling has started is possible now because it is being done for more than three months. Coal produced from almost all mines are now sampled by an independent party before it is dispatched to our thermal power plants. We have been able to arrive at an average quality on the basis of sampling done over the last three months and have settled some of our dues," said a senior NTPC official.

An independent entity now samples the coal being dispatched and ascertains its heat content. The arrangement is acceptable to both Coal India and NTPC. Prior to this, fuel quality was being vetted by Coal India but this was not acceptable to NTPC.

Over the last one year, NTPC had started paying Coal India on the basis of the quality of coal it sampled at its stations, leading to the faceoff. Coal India had stopped fuel supply to NTPC for a few days in April last year.