NTPC refuses to sign fuel supply pact

NTPC, the country’s biggest power producer, has refused to sign a fuel supply agreement (FSA) with Coal India, S Narsing Rao, newly appointed chairman of Coal India, said on Tuesday.

“The main issue is they are not agreeing to accept the gross calorific value (GCV) formula and want to go back to old useful heat value (UHV),” said Rao.

NTPC has demanded that Coal India rework not just the new FSA, but also all its existing contracts.

“We are having discussions in this regard,” said Rao.
He, however, assured that coal supplies will not be affected and hoped for an early resolution.

Coal India officials say the state-owned power producer apprehends that the quality of coal it would get from Coal India would not conform strictly with the quality gradation under the GCV system.

“NTPC officials have told us that we don’t own adequate amount of BOM calorie metres needed to determine the quality of coal. To be frank, we are not prepared to offer the quantity of specific quality of coal promised under existing Letter of Assurance at 80% level of the contract amount,” said one of the officials.