Going through excessive liquidity crunch, unbiased electrical energy mills have sought a degree taking part in subject with state-run energy producers when it comes to 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 fee mechanism for all customers”, which can be certain that all coal clients are on the identical pedestal.
“Whereas the unbiased energy producers’ (IPPs) coal programme is allotted solely after the fee is acquired by the coal firms, the central and state gencos get pleasure from the good thing about full credit score in opposition to 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 crops stood at Rs 25,013 crore, of which dues from IPPs had been Rs 176 crore.
Receivables from NTPC had 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 had been at round Rs 3,446 crore, Rs 2,965 crore and Rs 2,794 crore, respectively. “This illustrates the stark distinction in fee 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 therapy,” APP added.
CIL had carried out the usance letter of credit score (LC) mechanism—in different phrases, banker’s credit score— as a further mode of fee, however sources mentioned 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 instructed FE that “CIL accepts usance LCs solely from a restricted variety of banks” and “to avail usance LCs, the invoices must be deposited to the banks inside three days however CIL takes round every week to problem invoices”. The individual, refusing to be recognized, added that “with rising receivables from authorities entities, CIL is managing its working capital necessities by placing extra stress on IPPs”.