NTPC’s reservation in signing the fuel supply agreement (FSA) with Coal India Ltd (CIL) will not impact the country’s largest power producer, as CIL will not restrict supply of fuel in the current financial year, even if the agreements are not signed.
“NTPC will continue to get coal whether FSA is signed or not, as the government has asked us to extend the same for the current year, even though memorandum of understandings expired in March,” CIL Chairman and Managing Director S Narsing Rao said.
CIL had last year supplied 36 million tonnes of coal to NTPC and in the current financial year the projected requirement was 90 million tonnes based on 80 per cent supply, he said.
There was also payment dues of close to Rs 400 crore at the end of April over differences in the gross calorific value (GCV)-based formulae of coal.
“Payment is due and the amount is close to Rs 400 crore from January to April. NTPC Chairman Arup Roy Choudhury had a meeting with me on May 6 and they agreed to clear some of the dues,” Rao said.
The main bone of contention between the two public sector units on FSAs was NTPC declining to accept the GCV-based formulae and wanting to go back to the useful heat value system.
“The system has been changed by the government and so you do not have any choice whether you like it or not,” Rao said, hinting that CIL’s FSA agreement would not be diluted in the wake of reservations from certain power producers, including NTPC, to sign FSAs.
The coal ministry has also not received any formal refusal for signing the agreements with NTPC plants.
The FSAs to be signed by NTPC are mostly for additional units completed till 2011 at the existing power stations, for which pacts have already been entered.
