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Global agency to check coal quality

Posted on Dec 13, 05:48AM | IANS

Coal India Ltd. (CIL) Wednesday said it would appoint an independent international agency to check the quality following a long brawl with India's major power producer NTPC over its coal quality and signing the fuel supply agreement (FSA).

"We will appoint a third party for sampling and quality check of coal for the first time. The agency will be an alternative for joint-sampling, which we currently do with all of our customers," CIL chairman and managing director S. Narsing Rao told reporters after the coal major's board meeting here.

"This will not just be the case with NTPC but with all customers. Within the next two-three months we will invite bids to appoint the international agency in this regard," Rao said.

Power major NTPC had earlier repeatedly raised its concern over various quality issues and "inflated prices" of the coal behemoth.

After a long tussle with Coal India, NTPC, however, two days ago decided to enter into FSA with the firm within a month.

The public sector power utility's move came irrespective of any major breakthrough in the company's demand for a revision in FSA terms. However, Rao maintained Wednesday that as far as the FSA was concerned, there would be no change in the draft.

Although the Prime Minister's Office had set a deadline for power producers and the public sector CIL to sign the FSA by November, only 33 companies have signed the accord till now.

Meanwhile, Rao said Coal India was awaiting a green signal from the central cabinet to allow it to extract coal-bed methane (CBM) gas from its leasehold mining areas.

"There are a series of discussions in the ministries to entrust it (extraction of CBM) to CIL and we would be doing it. The process requires approval from cabinet," he said.

On the extraction of CBM gas, the new area of operation that the CIL may soon venture into, the CMD said it has already suggested to the central government that the company was not in favour of allowing other firms to extract the gas from its own leasehold mining areas," Rao said.

"While the marketing aspect would be regulated by government policy, for extraction we have suggested that there would be no other bidder. CIL authorities are already doing mining within their leasehold areas and there are practical problems and issues of safety if somebody else comes in," he added.