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Energy content in ECL coal lower by 30%, finds CIL study

Variance in energy content and the samples will mean decline in income for the same volume of coal supplied.

, ET Bureau|
Updated: Apr 15, 2013, 05.19 AM IST
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The result of the testing conducted last week spells bad news for Eastern Coalfields as the sample shows a quality that should be priced between Rs 460 per tonne and 550 per tonne.
The result of the testing conducted last week spells bad news for Eastern Coalfields as the sample shows a quality that should be priced between Rs 460 per tonne and 550 per tonne.
KOLKATA: There is a variance of between 15% and 30% in the energy content of the coal supplied by Eastern Coalfields Limited (ECL) to NPTC's thermal power stations at Farakka and Kahalgaon and the bill amount raised, a joint testing by Coal India, and NTPC has shown.

The result of the testing conducted last week spells bad news for Eastern Coalfields as the sample shows a quality that should be priced between Rs 460 per tonne and 550 per tonne. Eastern Coalfields bills the coal at Rs 640 per tonne, an amount that has been hotly contested and reduced by NTPC leading to a standoff for four days beginning April 1 when the subsidiary of Coal India, stopped coal supply. ECL says dues worth Rs 1,000 crore are pending.

Following the escalation of tension and disruption of supply, the oil ministry interceded and asked the three sides, Coal India, Eastern Coalfields and NTPC to conduct joint testing of the coal supplied. Now both Coal India and NTPC have agreed to conduct the sampling on a regular basis for the next few weeks.

Ailing Eastern Coalfields was forced to pay salaries by liquidating fixed deposits as cash inflows reduced. Variance in energy content and the samples will mean decline in income for the same volume of coal supplied. The reduction in income according to the first set of samples will vary between Rs 90 and Rs 180 per tonne of coal supplied. This may delay the turn around of the company.

However, this may turnout to be good news for power consumers as NTPC is bound to pass on the reduction in cost of generation to clients, mostly state utilities in Bihar, West Bengal and some of the northern states. Preliminary estimates suggest cost of power may decline by at least 70-80 paise per unit.

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