'Some power cos reluctant to sign fuel pacts with CIL'
New Delhi: Some power producers are still reluctant to enter into fuel supply pacts with Coal India (CIL) as they don't have long-term power purchase agreements (PPAs) with them which is mandatory for signing of fuel pacts.
"It is reported that they (power producers) are reluctant to migrate to revised model of FSAs apparently because of the fact that they are not having long-term PPAs," according to a Coal Ministry document.
CIL, the document further said, has signed a few Fuel Supply Agreements (FSAs) with power producers prior to the first Presidential Directive in April 4 last year.
The order made long term PPAs mandatory for signing of fuel pacts for power companies.
In these FSAs signed prior to April, 2012 the mandatory requirement of PPA was not there, according to the Coal Ministry document.
"After April 4, 2012 as well as in the latest Presidential Directive issued on July 17, 2013 long-term PPA with DISCOMs is a mandatory requirement. Therefore, CIL has advised these power producers to migrate to the new model with long-term PPAs," the document said.
The Coal Ministry had earlier set a deadline of August 31 for signing of FSAs which could not be met. A new deadline of September 6 was also not achieved.
So far, Coal India has entered into fuel supply agreements with about 140 power plants. CIL has to sign 173 FSAs for a capacity of 78,000 MW.