Coal India’s receivables from power companies increased 53% since April last year to Rs 12,400 crore in January, which company executives say reduces its ability to pay dividend at a time it is discussing the payout with the Centre, company executives said.
Coal India executives say NTPC and some power producers have disputed the company’s demand for incentives for supplying coal beyond annual quota and revised logistics rates since 2017. NTPC executives say the company had not withheld any legitimate payment.
Another set of state-government owned power plants from Uttar Pradesh, West Bengal, Andhra Pradesh, Tamil Nadu and Rajasthan are not paying dues regularly on time which has inflated the overall receivables. All this has bloated the total receivables by Rs 4,300 crore this year. Threefourth of this accrued since November.
“A meeting has been scheduled this week to try to iron out issues and reduce dues,” a senior CIL executive said.
Fuel supply pacts signed with power companies by Coal India include a clause that requires generators to pay an incentive in the form of a premium over notified price, predetermined in the agreement if the dry fuel producer supplies more than 90% of the annual contracted quantity for some plants and 75-80% for a different set of plants.
Almost three years ago, Coal India introduced flexi-utilisation which allowed every power company to lift total coal quantity agreed under supply agreement and use it in any of their plants irrespective of locations.