FE Bureau Posted online: Thursday, Jul 18, 2013
Kolkata : State-owned firms, Coal India and NTPC, have come to an understanding regarding fuel supply agreement and would shortly conclude all such agreements for 14,010 MW, the chairmen of the companies said at a joint press conference on Wednesday.
CIL chairman S Narsing Rao said there was scope to renew joint activities since their JV company, CIL NTPC Urja, which was formed in 2010 is still intact. Echoing the sentiment NTPC chairman Arup Roychowdhury said, "There is no fight between CIL and NTPC."
The statement assumes significance since both the companies have had differences for more than a year on the issue of coal quality and provisions of the model FSA.
The firms on Wednesday signed six FSAs for 3,890 MW of generation out of 29 FSAs that both the companies are supposed to sign. NTPC had
signed two FSAs with CIL subsidiary ECL on June 11 for generation of 1,000 MW.
Roychowdhury said of the 29 FSAs, 17 FSAs would exclusively be for supplies to NTPC. The rest 12 would be for the JV companies of NTPC. He said with NTPC, CIL's largest coal consumer signing the FSA, it would become a "model mining agreement" for other companies to sign. "The FSAs got stuck up mainly for some interpretation of quality issues and such issues have been ironed out," Roychowdhury said.
Rao said CIL was committed to finalise the third party sampling by end of August and that would be made effective from October 1. CIL on Wednesday opened the EoI, which it floated a few days ago to rope in third parties for joint sampling of coal quality at the miners end.
Third party sampling was a demand by NTPC to ensure quality supplies.
Rao said the FSA with NTPC for 1,4010 MW would require 60 million tonnes of coal at a trigger level of 80% and this was above the annual contract quantity of 114 mt, the agreed quantity signed in the earlier FSA for pre-2009 power plants. CIL was, however, confident that it would be able to meet the 80% trigger level from domestic sources failing which it would go for imports.
CIL has agreed to meet the 80% trigger level supplying 65% domestic coal and 15% imported coal but if CIL is able to meet its entire trigger level from domestic sources, it would not go for imports, Rao said.
Roychowdhury said NTPC would prefer getting its entire requirement from domestic sources since that would enable the company to the keep the cost of power production under control. "But we are ready to take imported coal from CIL if the price is good," Roychowdhury said.
He said CIL was meeting 80% trigger level with domestic coal in almost all the NTPC units. "We are unable to meet the 80% trigger level with domestic coal only in the 2,000 MW Simhadri power plant . But we hope do it very soon," Rao said.
Roychowdhury on Wednesday said that the 5,000 MW capacity which NTPC kept idle in the last fiscal was not for lack of coal but for lack of demand by the state electricity boards or companies.
However, NTPC was keen to join hands with CIL to develop coal blocks but "CIL's hands are full. I don't think they can come and join us. But if they want to join they are welcome. We have a JV company that stands," Roychowdhury said. The JV company CIL- NTPC Urja, which was formed in 2010 was mainly formed to jointly hunt coal assets abroad. But the company didn't take off with activities and both the power and coal major started warring on issues of coal quality,
Although Rao didn't want to comment on renewing the activities of the JV company except saying that the company stands, Roychowdhury said both CIL and NTPC were individually capable enough to acquire coal assets alone. NTPC was keen to join hands with CIL if it was in the area of coal mining, Roychowdhury said.
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