NTPC, Railways ink Rs 10,000 crore deal to transport coal

5-Nov-2018

State-run power producer NTPC has entered into a Rs 10,000-crore contract with the Indian Railways for transportation of coal from mines to all its plants through fiscal 2020.

The agreement entered into earlier this month has come as a boon for the cash-starved national transporter as NTPC has agreed to pay the entire amount in advance in three instalments.

In return, railways is offering NTPC fixed prices for the rest of this fiscal year and the next and preferential allotment of rakes. This will effectively lower the transportation cost of coal for NTPC — the transportation time would reduce significantly and any upcoming revision in rail tariffs won’t be applicable to the country’s largest power producer.

“NTPC will pay the Indian Railways a freight advance of Rs 10,000 crore inclusive of GST, towards payment of transport of coal for FY18-19 and FY19-20,” a senior railway ministry official said. “First instalment of Rs 2,000 crore has already been paid and the remaining amount would be paid in the current fiscal,” the official added.

Source: THE ECONOMIC TIMES