Joint test shows CIL's coal is of good quality

NTPC had alleged the miner is supplying stones in the name of coal

In a twist to the dispute between NTPC and the Coal India Ltd (CIL) over the quality of coal supplied by CIL to NTPC, a sample test done jointly by the two firms showed that the coal is of good quality.

NTPC had alleged CIL was giving it low-grade coal while charging for high-grade.

"The results have debunked all of NTPC's claims on coal quality," a senior CIL official told Business Standard.

An NTPC spokesperson could not be contacted for comments.

This was the first joint sampling by the two companies after the adoption of the new coal grading system.

NTPC's contention was that the coal quality it receives at its power plants is inferior to the quality billed for at the loading point.

The first test was carried out on April 4 by measuring the gross calorific value (GCV) at the loading end at Rajmahal mines of Eastern Coalfields Ltd (ECL) and the receiving end at Kahalgaon power plant in Bihar.

According to the results obtained, the GCV of coal dispatched from Rajmahal mines was 3,915 kilo calories per kilogram (Kcal per kg) and the GCV at Kahalgaon was found to be higher at 4,000 Kcal per kg.

In order to further authenticate the findings of the test done in the presence of officials from both the companies, a second sample test was carried out on April 6.

In the second case, the GCV at the receiving end jumped further to 4,345 Kcal per kg.

"The results have established that quality delivered is absolutely fine and conforms with declared quality. There is no denying that ECL coal has 36 per cent ash but we are charging them for low quality only," a senior CIL official told Business Standard.

The tussle over the issue began when NTPC withheld CIL's payments of about Rs 1,000 crore arguing the miner was supplying "stones in the name of coal".

CIL, in turn, stopped supplies to some of NTPC's stations since April 1. However, supplies from Rajmahal mines have now been largely restored.

Rajmahal mines in Jharkhand account for around 45 per cent of ECL's production. Its production is linked to Farakka and Kahalgaon power plants of NTPC through Merry-Go-Round (MGR) systems.

While the fuel supply agreement (FSA) requires joint sampling at the loading point, NTPC allegedly stopped participating in joint sampling since the adoption of GCV system in January 2012.

The two sides are likely to meet soon to sort out the differences.

The two firms also differ over certain provisions of the new fuel supply agreement.