NTPC backs out of coal transportation deal with Inland Waterways

In view of disagreement over various findings of the feasibility study report prepared by Inland Waterways Authority of India (IWAI), for the waterway transport of coal to the Farakka, Barh and Kahalgaon power stations, the power major, NTPC, has decided to not go ahead with a partnership with IWAI. In a recent missive, the power firm has made it clear that IWAI`s call for long-term commitments for ferrying 2-3 million tonnes per annum (MTPA) of imported coal to these power plants, using the proposed waterway, is not feasible, because NTPC doest not import coal directly. Rather, it imports coal via the state-owned companies-- Coal India Limited (CIL), State Trading Corporation and MMTC. Accordingly, NTPC has called on IWAI to devote its energy, instead, in negotiating with those trading firms, and not with the Maharanta PSU. On its part, NTPC has asserted that at best, it can make certain changes to the tender documents for coal import, to encourage these trading firms to use the waterway route whenever possible.

Pertinently, NTPC and IWAI signed a memorandum of understanding (MoU) in September 2008 to arrive at an appropriate methodology for the smooth and cost effective transport of coal to the three coal-starved power stations of NTPC. Subsequently, IWAI had commissioned a feasibility study by ILFS and a draft report was submitted to NTPC in February 2009, and later revised in December 2009, following NTPC`s recommendations. However, nothing much has happened after that, as, on one hand, NTPC started claiming that the feasibility study lacks credibility, while, on the other, IWAI has been maintaining that the proposed IWT is a competitive logistics solution for the transport of coal to the power major`s key power stations, in a scenario where the Railways is unable to fulfill all requirements of these projects.