Lingering row between CIL and power producers such as NTPC is casting a shadow over 10 per cent divestment plans in the coal major as its parent ministry has reservations about stake sale till issues, like Rs 9,000- crore dues owed by electricity utilities, are resolved.

“Coal Ministry in a letter to the Department of Disinvestment (DoD) has said that going ahead with the stake sale process in Coal India (CIL) is not advisable till power utilities including NTPC clear its dues and labour issues are resolved,” a Coal Ministry official told PTI.

The letter was sent to the DoD which had sought Coal Ministry’s views on further 10 per cent divestment of government’s share in the world’s largest coal miner, he said.

An Inter-ministerial Group (IMG), earlier this month approved 10 per cent equity sale in the coal PSU which is expected to fetch over Rs 17,000 crore to the government. The government, at present holds 90 per cent stake in it.

Power utilities, including NTPC and DVC, owe a huge amount of about Rs 9,000 crore to CIL and the Coal Ministry has already asked Power Ministry to ensure steps for payment of dues, including about Rs 3,000 crore by NTPC, to CIL.

Both Coal India and NTPC had locked horns over the issue as the power producer had refused to honour about Rs 1,000 crore bills of CIL subsidiary Eastern Coalfields (ECL) saying that the quality of fuel supplied was inferior.

Coal Secretary S K Srivastava in a letter to Power Secretary P Uma Shankar has said the disputes should be settled within the ambit of fuel supply agreement (FSA).

The official said the Ministry has said further divestment was not advisable at this juncture as employee unions are against it.

Last month, Indian National Mineworkers Federation had threatened to go on strike if the government went ahead with its plans to offload further equity in the Maharatna firm. Four other unions are also opposed to the stake sale.

One of the unions in a letter to the Coal Minister Sriprakash Jaiswal had said that the government had assured them to not to go beyond 10 per cent disinvestment last time.

CIL got listed on the bourses in 2010 through an initial public offering, through which the government raised Rs 15,199 crore by selling 10 per cent stake.

Coal India, which has a cash balance of about Rs 60,000 crore, will be the biggest disinvestment for the government in the 2013-14 fiscal if equity is offloaded as per plans.

The government plans to raise Rs 40,000 crore by way of PSU stake sales this fiscal.