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Continue supplying at least 50% coal to NTPC: Coal min to CIL

business Updated: Apr 05, 2013 12:52 IST

The coal ministry has directed Coal India to continue supplying at least 50% of fuel requirements to NTPC for the time being, even as CIL stopped supplies to the power major.

"The supply (of coal by CIL to NTPC) has been discontinued. CIL had taken a decision. But the instructions have been sent by our ministry (to CIL) that for the time being at least 50% of supply should continue," coal minister Sriprakash Jaiswal said today on the sidelines of a conference organised by Policy Development Initiative.

The comment comes following media reports that Coal India (CIL) has switched off fuel supply to power major in the wake of NTPC holding back payments.

The minister said: "In the meantime after having talks with NTPC, the dues will be recovered."

NTPC and CIL have locked horns over quality of coal being supplied to power plants.

Commenting on the quality of coal being supplied to NTPC, the minister said: "We are ready for third party inspection (of coal) but at the loading point....But we are not ready for third party inspection at reaching point (of coal)."

Replying to another question, he said: "There are few issues (with regard to FSAs) which would be resolved."

NTPC, the country's largest power producer has refused to sign fuel supply agreements (FSAs) with Coal India Ltd (CIL) as it feels the state-run firm was supplying inferior quality coal.

The Prime Minister's Office is pushing CIL to sign FSAs for supply of a minimum threshold of coal to power producers but NTPC feels the world's largest coal producer was supplying "rocks and boulders" just to meet its supply commitment.

NTPC buys close to 140 million tonnes of coal to fire its thermal power plants. While most of CIL's other customers have signed on dotted lines, NTPC has not signed FSA for 4,500 MW power generation capacity.

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

Power secretary P Uma Shankar on the other hand had said that his ministry and coal ministry should be able to solve the problem amicably.