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Web Exclusive | May 2013

Ministry told to ask power gencos to clear Rs 9K cr dues

The Union Coal Ministry has asked its power courterpart 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 (ECL), 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, 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.

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