Multiple grade slippages in coal supply to NTPC by CIL

Slippages are being observed in the coal supplied by Coal India subsidiaries like CCL, BCCL, ECL and MCL

Even after the introduction of mechanism for third party sampling of the quality of coal, the Power Ministry has alleged there are multiple grade slippages in the coal being supplied by CIL to NTPC power plants.

The development comes at a time when both coal and power ministries are under one minister-Piyush Goyal.

"It has been seen that even after introduction of third party sampling by CIL (Coal India Ltd), multiple grade slippages are observed in many cases," according to an official document.

The slippages are being observed in the coal supplied by CIL subsidiaries like Central Coalfields Ltd (CCL), Bharat Coking Coal Ltd (BCCL), Eastern Coalfields Ltd (ECL) and Mahanadi Coalfields (MCL) to NTPC power plants, including Dadri, Badarpur, Tanda Unchahar an Korba.

The Coal Ministry had introduced Gross Calorific Value (GCV) based system of grading of coal w.E.F January 1, 2012. This was keeping in sync with the international practices where coal is supplied based on GCV (kcal/kg).

However, Coal India adopted the GCV based pricing without being able to replicate the international practices, including sizing of coal below 50 mm size.

In the UHV method of grading of coal, the number of grades were seven .I.E A to G. However, in GCV grading of coal the number of grade are 17 (G1 to G 17).

"Under the Useful Hear Value (UHV) based grading system, bandwidth of different grades was varying from 600 to 1,100 Kcal/kg. Hence, minimum grade slippages were observed even for large difference between UHV invoiced by coal company and received at station end and there were hardly any commercial disputes with coal companies," the document said.

"But in case of the GCV based system with GCV band of 300 Kcal/kg, multiple grade slippages up to 7 grades are observed for coal sizing of (-) 250 mm," it added.

The issue of coal quality had last year had resulted in a standoff between the country's largest power producer NTPC and the world's largest coal producer Coal India (CIL).

Last year NTPC had alleged that it was being supplied inferior quality of coal.

This was followed by CIL stopping coal supplies to NTPC's plants saying the power major owed huge dues to the coal PSU.

Besides, NTPC had refused to enter into fuel supply pacts with Coal India.

After the government's intervention it was decided that third party mechanism would be introduced to check the quality of coal.