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FSAs On The Horizon Increase CIL Coal Supply Commitment

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Coal India Chairman S. Narsing Rao says the coal monolith has committed to providing 377 million tonnes of coal to the power sector in the current fiscal. This is a 30 million tonne increase from 2012-13, when CIL supplied 347 mt coal to the power sector.

Coal India and NTPC will sign a bunch of Fuel Supply Agreements (FSA) in Kolkata on Wednesday, 17 July. According to the existing in-use agreements between the miners and the power sector, CIL was to supply only 275 mt of coal in all.

On July 17, NTPC and CIL will sign 5 to 7 FSAs worth 4,000 MW. Already two FSAs for Farakka and Kahalgaon have been signed, said Rao, referring to the two plants in eastern India run by NTPC.

The new FSAs require coal India to provide 65 per cent of the power plants' requirement through domestic coal in the current and the next fiscal. The percentage is supposed to go up to 75 by the end of the 12th five year plan. Of the post 2009, a total 67 FSAs are to be signed.

Read Also: NTPC Backs Off, To Pay Rs 2,000 Cr Dues To Coal India

NTPC is required to sign 29 FSAs of which 17 are for NTPC plants while 12 are joint venture plants. Of the total 17 so far, only two agreements have been signed for the Farakka and Kahalgaon plants (500 MW each), which require 2.312 mt coal for each plant. Confident of meeting the coal requirements, CIL claims that between 2011-12 and 2012-13, the company reported a total increase in production of around 32 mt – almost all of it was given to the power sector to meet the increasing demand, said a CIL spokesperson.

CIL subsidiary Eastern Coalfields Ltd (ECL) had in April threatened to halt supplies to these two plants after the latter stopped paying the full price for shipments.

NTPC gets the bulk of its coal through long-term FSAs with Coal India. But the power producer has long complained it is forced to accept coal that is heavily adulterated with rocks and stones.

Rao said the fuel quality row was "kind of sorted out".

Both coal supplier and power producer now jointly monitor coal quality, opening up the possibility of wrangles over its true worth, but the government plans to change that by mandating a third party to judge value.

"There is some understanding between NTPC and us (as to) ... how do we solve this third-party evaluation and extrapolation into the period from when they started to reduce the payment," Rao said. "Reduced payments affected us from October onwards."


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ntpc coal india cil moyna fuel supply