Coal India signs fuel supply pacts with 60 power plants

NTPC refused to sign the agreement as it feels the PSU firm is supplying inferior quality coal

State-run Coal India (CIL) has so far entered into fuel supply pacts with 60 power plants even as the deadline set by the Prime Minister's Office for signing of the FSAs expired in January.

"So far only 60 power plants have entered into fuel supply pacts with CIL," a source close to the development said.

India's largest power producer NTPC has refused to sign FSA with CIL as it feels the state-run firm was supplying inferior quality coal.

NTPC feels the world's largest coal producer was supplying "rocks and boulders" just to meet its supply commitment.

NTPC Chairman and Managing Director Arup Roy Choudhury had said it has agreed on almost all terms and conditions of the FSAs and is ready to sign the agreements provided CIL promises to give a minimum calorific value coal.

"They are giving us poor quality coal ... We don't want it," he had said, adding that the quality of coal NTPC receives is "extremely" poor and sometimes "it is full of stones, boulders and dirt".

NTPC power plants need coal of minimum 3,100 kilocalories but CIL at times has supplied coal with average heat generating capacity of about 2,100 kilocalories, according to the power company.

NTPC buys close to 140 million tonnes of coal to fire its thermal power plants. NTPC has not signed FSAs for 4,500 MW power generation capacity.

The NTPC head said the company has resolved all the issues with CIL and the only matter coming in the way of signing the FSAs was "poor quality" coal.

A total of 143 FSAs are to be signed by CIL in respect of identified power projects of 60,000-Mw capacity, which have been assured for coal supply, in the next five years.