Coal India board clears decks for supply pact with NTPC
Kolkata: The Coal India board on Wednesday cleared the decks for fuel supply agreement with the country's largest power producer NTPC after both the PSUs agreed to bury supply disputes.
"We are in a position to sign the FSA. The contentious issue has been finally resolved. The Board has cleared it today ... And I understand it (read NTPC) has also cleared the FSA," Coal India chairman S Narsing Rao said here today after a five-hour board meeting.
According to the mutually-agreed formula, CIL has finally agreed to ensure quality.
"Incentives will be reduced if coal supply is below the calorific value of 3100 Kcal," Rao said.
On the issue of supply to units at the same power plant, Coal India will be eligible for incentives only if it supplies more than 90 percent of the annual contracted quantity for old units and 80 percent of the supplies to the new units with new FSA at power stations where both new and old units are located, Rao said.
With both the PSU boards finally agreeing to sign the FSA one year after the agreement was floated, the coal supply agreement for NTPC got settled, paving the way for smaller power producers to go in for similar supply accords.