CIL to levy interest for delay in payments beyond 15 days

KOLKATA: Coal India (CIL) will strictly implement its credit policy and levy penal interest on payment delayed beyond 15 days, and stop supply if money is not paid in a month as the company wants to bring down receivables that touched Rs 12,500 crore in April.

“Although we have a policy of levying penal interest and discontinuing coal supplies if dues extend beyond a month, it was never implemented strictly. Over the past few years, dues were hovering around Rs 10,000 crore, affecting the company’s finances adversely. Towards the end of the last fiscal, it touched Rs 12,500 crore, prompting the board of directors to direct its executives to strictly implement the policy for defaulters,” a senior Coal India executive said.

State-owned Coal India has started warning defaulters about penal interests and supply cuts, which reduced the dues to Rs 9,000 crore, the executive said. In July, almost 60% of the dues were from four public sector companies. NTPC’s due was Rs 2,600 crore, followed by steel maker SAIL, Rs 1,000 crore, and West Bengal Power Development Corporation at Rs 900 crore. Damodar Valley Corporation’s outstanding was Rs 693 crore.

Earlier, consumers used to raise issues about the quality of coal delivered and raised disputes on billed amounts making it difficult for the fuel supplier to ensure settlement of dues. As Coal India moved to a system of joint sampling and measurement of heat content in coal, dispute resolution has been streamlined making it easier for the company to raise bills or adjust them in case of disputes.

According to an NTPC executive, bulk of the outstandings were old dues raised on mismatch in quality of coal delivered and the quality on which the billing was done. Since there has always been a mismatch in quality claimed to be delivered and the actual quality delivered, certain amount always remains outstanding which gets settled only when both parties agrees to the final outcome. Nevertheless, NTPC’s dues were around Rs 3,500 crore towards the beginning of the fiscal which have declined to Rs 2,600 crore by the beginning of July this year.

Coal India Ltd