NTPC says will pay for coal as per quality at receiving end

Hours before a meeting to resolve its differences with CIL, NTPC today said it will continue to make payments based on quality measurements at its receiving stations until the supplier improves its infrastructure at mine-end.

The heads of NTPC and Coal India are meeting the Coal Secretary in the evening today to resolve the issue of fuel quality and payment dispute.

Speaking to reporters, NTPC Director (Operations) N N Misra said, ".. Until Coal India and its subsidiary companies are able to build and upgrade their infrastructure to the level required for GCV measurement of coal at mine-end ... Or they are able to introduce third party measurement system acceptable to both the parties, NTPC would make payments based on measurement at its stations."

Coal India has said that dues of over Rs 2,000 have been accumulated for 2012-13 after NTPC made payments for the coal purchase making deduction according to its internal calculations and which is grossly contested by the coal PSU.

"But as far as we are concerned it is not an outstanding, we have paid them (Coal India) for the quality of coal. We are in discussion with them that this cannot continue forever and hopefully we reach a conversion soon on this issue," Misra told reporters.

"The biggest issue is variance in coal-quality at loading and receiving ends and third-party sampling is a welcome gesture if it is done with transparency," he said.

NTPC, which buys coal of worth over Rs 20,000 crore annually from CIL, has refused to sign fuel supply agreements with the coal PSU as it feels the fuel being supplied is of poor quality.

It has said that due to large scale grade slippage between sampling and analysis done by it, payments for the fuel are being made as per GCV measured at its station end.

Eastern Coalfields officials had said that NTPC had made payments of Rs 150 crore against their dues of Rs 1,000 crore. ECL had stopped coal supply to NTPC from January 1 but later agreed to joint sampling and resumed supply.

"The total dues will be close to Rs 2,000 crore accumulated to Eastern Coalfields and Northern Coalfields. We hope to recover the dues," Coal India Chairman S Narsing Rao had said earlier.

He had said that engaging third party independent quality organisation has already been initiated and by August- September this year it would be implemented.