CIL agrees to NTPC's demand for appointing TPA for fuel testing at loading sites

The power major argued that CIL had been providing low-grade fuel for its power plants, yet demanded payments for the fuel which were of higher grade.

Dec 03, 2014 09:12 IST India Infoline News Service

In an agreement that would ensure a better grade of coal at the power plants, Coal India has agreed to NTPC's demand to pay the miner, only after the fuel quality at the loading sites are inspected by the third-party agencies (TPA).

This ends a 20-month long dispute between India's largest miner CIL and largest power producer NTPC. The power major argued that CIL had been providing low-grade fuel for its power plants, yet demanded payments for the fuel which were of higher grade.

Loading points are the sites, where the coal is temporarily stored on rakes. With this decision coming into effect, not only NTPC but all the power producers will have the freedom to appoint TPA for fuel inspection, and after that pay CIL on the grade of coal being supplied for their power plants. 

Last year in April, CIL and NTPC had conducted joint tests, in which the coal supplied by the CIL had come out to be of good quality. The tests were carried out to determine the gross calorific value (GCV) at the loading end at Rajmahal mines of Eastern Coalfields Ltd (ECL) and the receiving end at Kahalgaon power plant in Bihar. NTPC however trashed the reports, saying that fake samples were produced during these tests. 

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