Thursday, April 4, 2013

NTPC sets terms for fuel supply pact with Coal India

NEW DELHI, April 4, 2013

NTPC Ltd. has refused to ink a fuel supply agreement (FSA) with Coal India Ltd. (CIL), stating that the overall quality of the coal supplied needed to be enhanced.

NTPC Chairman and Managing Director Arup Roy Choudhury said here on Wednesday that CIL was sending inferior quality of coal just to meet its commitment for supplying a certain amount of coal. The Prime Minister\'s Office (PMO) is pushing CIL to sign FSAs for supply of a minimum threshold of coal to power producers.

However, Mr. Choudhury said the company had agreed on almost all the terms and conditions of the FSAs. It was ready to sign the agreements provided CIL promised to give a minimum calorific value coal, he added. "They are giving us poor quality coal which we do not want. The quality of coal NTPC receives is extremely poor and sometimes it is full of stones, boulders and dirt," he said.

He said NTPC power plants needed coal with a minimum average heat generating capacity of about 3,100 kilocalories but CIL at times had supplied coal with a capacity of only 2,100 kilocalories.

"The boilers at the NTPC plant are designed to handle coal of 3100 kilocalories, and if they are fed with inferior quality fuel, it would have an impact on the equipment and overall efficiency of the plant," he added.

One of the biggest consumers of coal, NTPC buys around 140 million tonnes of coal for its power plants. He said CIL wanted bonus even though it has met its supply commitment by including inferior quality coal in the consignment. "We need to resolve this quality issue first and if need be the matter should go to Cabinet for a proper resolution," he said. 56 power generation companies so far have signed FSAs with CIL.

Fresh bids

Mr. Choudhury further said that NTPC would invite fresh bids for securing power gear for its proposed 1,600-MW thermal power plant at Darlipalli in Odisha, after BGR Energy, one of the equipment suppliers, pulled out of the project recently.
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