Coal India’s receivables from power firms touch Rs 13,800 crore in February

KOLKATA: Coal India's receivables from power companies crossed Rs 13,800 crore in February, increasing almost 71% since April 2019.

Coal India executives are alleging that power producers are disputing and refusing to pay incentives accrued for supplying coal beyond annual quota and revised logistics rates since 2017.

A 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 5,700 crore this year.

CIL executives are in talks with its customers for bringing down the sum.

Fuel supply agreements 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.

lmost three years ago, Coal India introduced flexi-utilization which allowed every power company to lift total quantities agreed under supply agreement and use it in any of their plants irrespective of locations. It was not allowed earlier when sources of coal and its destinations were fixed for any power station.

“Flexi-utilization was introduced by Coal India on request of powerhouses. This has increased offtake by some large power producers and some power plants have received more than their contracted quantity but they are not paying performance incentives that kicks in when supplies are more than 90 percent or 75% of annual contracted quantity,” a Coal India executive had earlier told ET. “Dues have increased also since power houses are paying transport costs on older rates.”