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Coal India signs fuel supply pacts with 14 power plants

Last Updated: Wednesday, May 16, 2012 - 14:57

New Delhi: Coal India has so far entered into pacts with 14 power plants for the supply of fossil fuel, while some have refused to sign it due to their objections on some of the clauses of the model fuel supply agreement.

"Till now 14 power units have entered into fuel supply pact with Coal India (CIL). The last unit with which the PSU has signed FSA is CESC," a source close to the development said.

The development follows power ministry seeking the intervention of the Prime Minister's Office to resolve issues related to CIL's new fuel supply agreement.

Most of the power producers have reservations about certain clauses, including those related to penalty, in the revised Fuel Supply Agreement (FSA) put forward by CIL.

Power producer NTPC is among the companies that have refused to sign FSA.

So far other power firms with which CIL has entered into pacts includes Reliance Power's Rosa Power project, Lanco Anpara Power and Bajaj Hindustan.

Last month, the government had issued a directive to CIL to commit a minimum of 80 percent of fuel supply to power producers, failing which it would attract penalty.

The directive was issued following a meeting between the power sector honchos and the Prime Minister's Office.

On any timeline for the Maharatna firm to sign FSAs with all the 48 power units, a source with CIL had earlier said: "It is difficult to give a time frame as CIL is signing pacts as and when the power companies are coming forward".

The state-owned firm is likely to enter into pacts with firms having a capacity of less than 30,000 MW.

The model FSA format includes clauses like suspension of supply of coal to power firms if they were found diverting the dry fuel for any purpose other than the specified end-use plant.

It also includes clauses like 80 percent trigger level and penalty of 0.01 percent applicable on CIL in case of failure to adhere to the agreement.


First Published: Wednesday, May 16, 2012 - 14:57
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