The Coal Ministry has hit back at the Power Ministry for raising coal quality issues with the Cabinet Committee on Investments (CCI), headed by the Prime Minister, Manmohan Singh.
The issues raised are “completely unjustified,” the Coal Ministry said in a strongly-worded reply to the Power Ministry on its note submitted to the CCI.
It, in fact, blamed the public sector power producer, NTPC, for not signing agreements with Coal India, leading to payment delays. The Coal Ministry also made it clear that no new proposal relating to quality and sampling could be taken up, as many power utilities, including Government-owned, had already signed fuel supply pacts.
NTPC has not signed fuel supply pacts for nearly 5,000 MW capacity, leading to a deadlock between the two Maharatna companies.
“NTPC has failed to make payments as per the bills raised by the coal companies. This has raised the dispute between the two organisations (NTPC and Coal India). NTPC has unilaterally made deductions and made payments based on recordings at the unloading end, which has no legal sanctity. Such unilateral action of NTPC is unjustified,” the Coal Ministry said in its response to the Power Ministry.
According to the Power Ministry’ proposal, if Coal India supplies fuel to NTPC of less than 3,100 kcal/kg, it would not be considered under the annual contract quantity. Only the average of sampling done at the coal loading and receiving point at a power station would be considered under the said contract, it added.
The Coal Ministry said the reason for this is that after changing the coal pricing mechanism from useful heat value (UHV) to gross calorific value (GCV), the fuel is classified into 17 bands spread over 2,200 kcal/kg to 7,000 kcal/kg. Therefore, there is “no scope for limiting coal supplies above 3,100 kcal/kg,” it added.
The Coal Ministry said on the one hand, NTPC had been declining to accept coal on the grounds that GCV was low when supplied under FSA, while on the other, it had bought the same coal grades of about 3.5 lakh tonne from Jayant, Dudhichua and other mines under e-auction, which is not even covered under the sampling protocol.
It pointed out that NTPC was getting supplies from the same sources from where it had been getting these since decades. Hence, its request for not accepting supplies of coal below certain calorific value was “not understandable”, it added.
Coal India, on its part, has offered to wash and upgrade coal to above 3,100 kcal/kg, provided NTPC gives an undertaking that it will ‘buy washed coal.’
The Coal Ministry also said that NTPC had unilaterally decided not to participate in the joint-sampling analysis done at loading points.
Moreover, NTPC’s claim that its coal consumption had increased because of getting lower quality coal did not match its consumption, plant load factor and coal stock positions at various stations, it added.
siddhartha.s@thehindu.co.in