State Energy Minister Saurabh Patel said GSEC and NTPC will collectively save Rs 900 crore through the deal.

"With the initial swap of 10 lakh MT of coal, Gujarat will save Rs 140 crore. Later, when 25 lakh MT of coal will be swapped, Gujarat will save Rs 400 crore, while NTPC will save Rs 500 crore, taking the total amount of mutual benefit to Rs 900 crore," an official release quoted Patel as saying.

Most power generating companies are given specific allocation of coal by Coal India Ltd. According to a Central directive, power generating firms are needed to import 10-15 percent of their total coal requirement.

"NTPC's imported coal lands at Mundra port in Gujarat and then taken to its Chhattisgarh power plant. On the other hand, GSEC gets coal from Korba-Reva mines in Chhattisgarh, which are 1,300 km away. So we suggested that GSEC's coal should be given to NTPC and vice versa, so that both companies can save on railway freight," he said.

"Gujarat government had made several representations to the earlier government at Centre but no decision was taken. We had raised this issue in Power Ministers' conference in 2009, 2010, 2011 and 2013," said Patel.

"The Narendra Modi-led government took quick decision and approved our demand for coal swapping," he added.

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