In what may come as a relief for power project developers, the coal ministry has directed state-owned coal companies to ensure uninterrupted fuel supply to plants commissioned till March 31, 2012, as well as those to be commissioned during fiscal 2012-13 even if they fail to sign fuel supply agreements (FSAs). The coal supply to these power projects would be maintained by coal companies under the MoU route till the time fuel user and supplier companies are ready to sign the FSAs.
The move is expected to benefit about 18,000 MW of power projects of a host of companies, including NTPC, Balco, Adani, GMR and DVC, that have recently been commissioned or are in advanced stage of commissioning.
There was uncertainty over the supply of coal to these projects as Coal India (CIL) had decided to offer fuel to plants only through the FSA route as directed by the committee of secretaries (CoS). As per the directions of CoS, CIL is currently in the process of signing FSAs for projects commissioned till December 31, 2011. FSAs for other projects are expected to come up for consideration only later but power companies fear that this delay could make their project remain idle even after commissioning.
The coal ministry directive has come after the power ministry expressed concern over the delays in signing of the FSAs. As per the decision, the coal to these power plants will be supplied for the quantities to be decided in consultation with the Central Electricity Authority till the time the FSAs for these plants are signed.