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Web Exclusive | March 2013

NTPC for no incentives to CIL for low quality coal supply

The government-owned Coal India (CIL) should not be given incentives that it gets for exceeding the minimum assured quantity in case it supplies inferior quality fuel to power plants, a top NTPC official said on March 25. As per the fuel supply agreement, if CIL supplies more than the minimum assured quantity of 80 per cent of the total order to its clients, then the company is provided with some incentives.

If the quality of the fuel supplied is not up to the mark then there should not be any incentive for the coal major, some power producers felt. NTPC Chairman and Managing Director Arup Roy Choudhury said on the sidelines of a SCOPE event in Delhi that NTPC has resolved 95 per cent of all its issues.

There are only one or two issues that remain to be sorted out, and one of them is the quality of coal, he added. Coal India has so far signed fuel supply pacts with 56 power plants.

He added that if the coal major supplies cheap quality of coal to thermal power generating stations, it should not be given any incentives. Choudhury said that NTPC cannot sign an FSA (fuel supply agreement) without knowing what is the quality of the coal, but if they (Coal India) give low quality coal to NTPC they should not be incentivised, this is one big issue which remains to be sorted out, he added. He added that CIL has agreed to a third party measurement of coal to ascertain its quality.

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