Phrases of cost: Non-public gencos need Coal India Ltd to cease ‘favouring’ govt corporations
Receivables from NTPC have been round Rs 5,550 crore and DVC was Rs 4,145 crore whereas the dues of the state gencos of Maharashtra, Uttar Pradesh and West Bengal have been at round Rs 3,446 crore, Rs 2,965 crore and Rs 2,794 crore, respectively.
Dealing with excessive liquidity crunch, impartial electrical energy mills have sought a degree enjoying discipline with state-run energy producers by way of making funds for gasoline to Coal India (CIL). In a letter despatched to the Union ministry of coal, the Affiliation of Energy Producers has requested the federal government to direct CIL to “strictly guaranteeing the advance cost mechanism for all shoppers”, which is able to make sure that all coal clients are on the identical pedestal.
“Whereas the impartial energy producers’ (IPPs) coal programme is allotted solely after the cost is obtained by the coal firms, the central and state gencos get pleasure from the good thing about full credit score towards their coal purchases from the identical coal firms,” the letter, reviewed by FE, from energy producers argued. On the finish of February, receivables of CIL from energy vegetation stood at Rs 25,013 crore, of which dues from IPPs have been Rs 176 crore.
Receivables from NTPC have been round Rs 5,550 crore and DVC was Rs 4,145 crore whereas the dues of the state gencos of Maharashtra, Uttar Pradesh and West Bengal have been at round Rs 3,446 crore, Rs 2,965 crore and Rs 2,794 crore, respectively. “This illustrates the stark distinction in cost phrases between IPPs and PSU mills – the already-stressed IPPs face exceedingly stringent phrases for buying and lifting of coal, whereas the PSU mills get preferential remedy,” APP added.
CIL had applied the usance letter of credit score (LC) mechanism—in different phrases, banker’s credit score— as a further mode of cost, however sources stated only a few IPPs are availing the system as “there are difficulties in operationalising usance LCs as a result of the system is complicated”. A senior official from a personal energy firm informed FE that “CIL accepts usance LCs solely from a restricted variety of banks” and “to avail usance LCs, the invoices have to be deposited to the banks inside three days however CIL takes round every week to problem invoices”. The particular person, refusing to be recognized, added that “with rising receivables from authorities entities, CIL is managing its working capital necessities by placing extra strain on IPPs”.