Power, coal ministries resolve issues, FSAs to be inked in a month

Dec 22 2012, 01:10 IST
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SummaryCoal India will offer the same contractual terms and conditions to both public and private power plants for fuel supply, ending the current practice of discrimination against private players, coal minister Sriprakash Jaiswal said on Friday.

Coal India will offer the same contractual terms and conditions to both public and private power plants for fuel supply, ending the current practice of discrimination against private players, coal minister Sriprakash Jaiswal said on Friday.

“We have taken a joint decision that there will be no distinction. Modalities related to the issues will be decided by the companies concerned,” power minister Jyotiraditya Madhavrao Scindia said after meeting the coal minister.

The power ministry had earlier protested the CIL practice of offering relatively unfavourable terms to private companies in fuel supply agreements ( FSAs).

The FSA proposed by CIL offered favourable terms to PSU power projects in case of termination of agreement, provision of security deposit, suspension of coal supplies and settlement of disputes. The issue were first flagged by FE quoting the letter written by Scindia to the coal minister.

After nearly two-hour long meeting with power minister, coal minister Sriprakash Jaiswal said most of the issues have been resolved. "Most of the issues related to FSAs (fuel supply agreements) have been addressed. The FSAs (between power companies and CIL) are likely to be signed in a month's time," Jaiswal told reporters.

Noting that he had a "freewheeling and positive discussion" with the coal minister, Scindia said the power companies would sign FSAs over the next month.

The meeting was also attended by top officials of both power and coal ministries besides Coal India Chairman S Narsing Rao.

Scindia also said a joint policy on price pooling of coal is being worked out and was expected within ten days. "We are likely to come out with a joint policy on coal price pooling over the next week or ten days.”

The Prime Minister's Office (PMO) on December 17 had set a one-month deadline for the public sector power companies, including NTPC, to sign fuel supply pacts with CIL failing which FSAs would be withdrawn.

The PMO had in October asked power companies to sign the FSAs with CIL by November-end even if they don't have binding pacts for sale of electricity.

The meeting was convened to sort out issues impeding signing of FSA between CIL and power producers. Only 33 power units with capacity of 9,671 mw have signed FSAs with CIL so far.

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