5 OCT, 2012, DEBJOY SENGUPTA, ET BUREAU
NEW DELHI: State-owned miner Coal India has sought permission to import coal for its consumers on a cost-plus basis under the new fuel supply agreement (FSA), but not everyone is willing to buy imported coal from CIL at a price they are quoting.
The largest consumer NTPC said it would buy the coal if it was cheaper than its current imports.
Cost-plus refers to supplying coal at a cost at which it is available in the international market, including additional charges like freight, other costs and statutory charges as well as a 2 per cent administrative charge by CIL. "We will use state agencies like MMTC and STC for importing coal on behalf of our consumers," said Coal India chairman S Narsing Rao.
"We are ready to take imported coal from Coal India if they can supply at a price which is lower than our current cost of imports. We used to import through state agencies but subsequently decided to import on our own. This resulted in a cost savings of 20 per cent on imports," explained NTPC chairman Arup Roy Choudhury.
If CIL imports coal through state agencies, it may not be able to offer a cheaper rate to NTPC, which may prompt the largest power producer to opt out.
According to estimates, CIL will have to import around 18-19 million tonnes to meet its import obligations if all its 50-odd consumers, who are to sign the FSA, agree. NTPC will be consuming half this amount, but if it opts out, CIL may be importing only about 9-10 million tonnes.
Consumers will also have to pay in advance for imported coal which may be difficult for power plants run by state governments because many of them are running losses and may not be able to pay in advance.
However, if consumers opt out of imported coal, its supply will be reduced to 65 per cent in the first year from 80 per cent which is the trigger level. According to the new FSA, consumers will be offered 15 per cent of imported coal. It has also been assumed that 1 tonne of imported coal will be considered equivalent to 1.5 tonnes of domestic coal.
"This means that if a consumer's annual contracted quantity is 100 tonnes, he is eligible to receive 80 tonnes of domestic coal, including 15t of imports. If it opts for imported coal, it will only be given 10 tonnes," a senior CIL official said.
NEW DELHI: State-owned miner Coal India has sought permission to import coal for its consumers on a cost-plus basis under the new fuel supply agreement (FSA), but not everyone is willing to buy imported coal from CIL at a price they are quoting.
The largest consumer NTPC said it would buy the coal if it was cheaper than its current imports.
Cost-plus refers to supplying coal at a cost at which it is available in the international market, including additional charges like freight, other costs and statutory charges as well as a 2 per cent administrative charge by CIL. "We will use state agencies like MMTC and STC for importing coal on behalf of our consumers," said Coal India chairman S Narsing Rao.
"We are ready to take imported coal from Coal India if they can supply at a price which is lower than our current cost of imports. We used to import through state agencies but subsequently decided to import on our own. This resulted in a cost savings of 20 per cent on imports," explained NTPC chairman Arup Roy Choudhury.
If CIL imports coal through state agencies, it may not be able to offer a cheaper rate to NTPC, which may prompt the largest power producer to opt out.
According to estimates, CIL will have to import around 18-19 million tonnes to meet its import obligations if all its 50-odd consumers, who are to sign the FSA, agree. NTPC will be consuming half this amount, but if it opts out, CIL may be importing only about 9-10 million tonnes.
Consumers will also have to pay in advance for imported coal which may be difficult for power plants run by state governments because many of them are running losses and may not be able to pay in advance.
However, if consumers opt out of imported coal, its supply will be reduced to 65 per cent in the first year from 80 per cent which is the trigger level. According to the new FSA, consumers will be offered 15 per cent of imported coal. It has also been assumed that 1 tonne of imported coal will be considered equivalent to 1.5 tonnes of domestic coal.
"This means that if a consumer's annual contracted quantity is 100 tonnes, he is eligible to receive 80 tonnes of domestic coal, including 15t of imports. If it opts for imported coal, it will only be given 10 tonnes," a senior CIL official said.
No comments:
Post a Comment