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May 21, 2012

CIL to supply coal to NTPC even without the FSA…

Coal Supply

As said by Coal India Ltd (CIL) Chairman & MD Mr. Narsing Rao, the NTPC will continue to get coal supply even if it has not signed FSA with CIL as the Government has directed CIL to extend the coal supply even though the MoUs are expired in March 2012.

 

NTPC is not willing to sign the FSA proposed by CIL due to various issue related to minimum supply level, penal provisions etc.

 

CIL in the previous year had supplied 36 million tonne of coal to NTPC and in the current fiscal the projected requirement was 90 million tonne based on 80 per cent supply.

 

There was also payment dues of close to Rs 400 crore at end of April over differences in Gross Calorific Value (GCV) based formulae of coal. However as said by Mr. Rao, NTPC will be clearing some of these dues in due course of time.

 

According to CIL, the main cause of quarrel between CIL & NTPC on FSAs is the recent GCV based formulae proposed by the Government. It seems that NTPC want to have the Useful Heat Value system instead of the current GCV system.

 

However as said by Mr. Rao, the system has been changed by the government and so CIL does not have any choice. Further according to him, 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.

 

 

 


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