In a letter to its subsidiaries, CIL said that the modification has been approved by the competent authority and will be effective from April 1. The changes are expected to reduce financial burden for CIL as average for pricing of coal is expected to be lower than the base price of the highest grade of coal supplied.
But the new mechanism would only be for non-core customers who account for close to 20% of CIL's total supplies. CIL has signed 157 FSAs so far for a capacity of 71,145 MW. The coal PSU is yet to enter into fuel supply pacts with 15 power units as certain issues related to them, such as change in ownership and extension of supplies, are being considered separately.
The Cabinet Committee on Investment (CCI) had earlier stated that the timelines for signing of fuel supply pacts for power projects of 78,000 MW capacity should be met.