5 SEP, 2012, PTI
NEW DELHI: Country's largest power producer NTPC had to pay an excess amount of Rs 699 crore during 2008-11 due to its failure to ensure that imported coal is supplied with least transportation cost by STC and MMTC.
NTPC entered into agreements with STC and MMTC in 2008 and 2009 respectively, for procurement of over 20 million tonnes of coal on 'for destination basis' at the power stations through various ports in the country.
The agreements provided that STC and MMTC shall import the coal through various discharge ports in India in such a way that the landed cost of coal at power stations is "optimum" considering the technical viability of coal movement by Railways from ports to power stations.
The agreement further provided that in case of port constraints, the import of coal for a particular power station may be routed through alternate suitable ports, with prior permission from NTPC.
"Due to non-enforcement of contractual terms regarding supplies of imported coal at the optimum landed cost, the company had to incur an avoidable expenditure of Rs 699 crore during 2008-11 on supplies of coal through routes other than optimum routes," CAG said.
The audit observed that during the period 2008 to March 2011, 11.95 million metric tonnes of imported coal (56 per cent of total quantity imported) was supplied by STC or MMTC to various power stations of the company from ports other than those which involved least total transportation cost.
The report further said: "Out of total quantity of 11.95 million tonnes supplied through non-optimum ports, 4.85 million tonnes were supplied through Mundra port belonging to Adani Enterprises." NTPC in its reply had said that the company was importing coal based on delivery at power station and the most optimum route is decided by the supplier based on the location of the station. The report said NTPC management had informed the CAG that the company had no role to play in deciding the port.
NEW DELHI: Country's largest power producer NTPC had to pay an excess amount of Rs 699 crore during 2008-11 due to its failure to ensure that imported coal is supplied with least transportation cost by STC and MMTC.
NTPC entered into agreements with STC and MMTC in 2008 and 2009 respectively, for procurement of over 20 million tonnes of coal on 'for destination basis' at the power stations through various ports in the country.
The agreements provided that STC and MMTC shall import the coal through various discharge ports in India in such a way that the landed cost of coal at power stations is "optimum" considering the technical viability of coal movement by Railways from ports to power stations.
The agreement further provided that in case of port constraints, the import of coal for a particular power station may be routed through alternate suitable ports, with prior permission from NTPC.
"Due to non-enforcement of contractual terms regarding supplies of imported coal at the optimum landed cost, the company had to incur an avoidable expenditure of Rs 699 crore during 2008-11 on supplies of coal through routes other than optimum routes," CAG said.
The audit observed that during the period 2008 to March 2011, 11.95 million metric tonnes of imported coal (56 per cent of total quantity imported) was supplied by STC or MMTC to various power stations of the company from ports other than those which involved least total transportation cost.
The report further said: "Out of total quantity of 11.95 million tonnes supplied through non-optimum ports, 4.85 million tonnes were supplied through Mundra port belonging to Adani Enterprises." NTPC in its reply had said that the company was importing coal based on delivery at power station and the most optimum route is decided by the supplier based on the location of the station. The report said NTPC management had informed the CAG that the company had no role to play in deciding the port.
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