Coal India (CIL) has modified its fuel supply agreement to allow a third party to collect samples and determine the quality of the dry fuel.

The modified provision will be effective after third-party sampling starts, CIL said. It replaces a system of sampling and analysis that was to be conducted jointly by the buyer and the seller of coal.

?Samples of coal shall be collected by third party by manual method during each of the shifts and at each of the delivery points for determining the quality of coal,? the state-owned company said on its website.

The third party is an agency that will collect, prepare and analyse coal samples at loading points, it added. Samples of coal will be collected in the presence of representatives of the seller (Coal India) and the purchaser.

?In the event for any reason whatsoever third party sampling and analysis could not be conducted, joint sampling and analysis shall be carried out by the seller in the presence of the purchaser at the loading end. ?In the event the purchaser fails or declines to participate in the process of sampling and analysis by the designated third party…such failure or refusal of the purchaser shall not be considered a ground for disputing the result submitted by the third party, which will be binding on both the parties,? Coal India said.

The Coal Ministry had said third-party sampling of coal supplied by CIL is likely to be put in place by the end of this year.

NTPC, the country?s largest power producer, had earlier refused to sign FSAs with CIL as it was of the view that the state-run firm was supplying inferior quality coal.

The Centre had in July issued a Presidential directive to CIL to amend the fuel supply agreements (FSAs) with its power sector buyers and to also import coal to bridge the demand-supply deficit.

Assured fuel supply is necessary to enable the commissioning of 78,000 MW capacity to be ready within two years.

This follows a Presidential directive issued earlier on April 3 wherein CIL was mandated to sign FSAs with power producers assuring them a supply trigger level of at least 80 per cent of the committed coal delivery. The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Manmohan Singh, on June 21 had asked CIL to sign FSAs for a total capacity of 78,000 MW, including cases of tapering linkage, which are likely to be commissioned by March 31, 2015.

A top coal ministry official said, of 78,000 MW, supplying fuel to 60,000 MW capacity had already been agreed between coal and power ministries. The additional capacity of 7,000 MW would also get assured fuel supply, and 11,000 MW would get tapering linkages.

To meet its remaining obligations under FSA, CIL may import coal and supply thermal power plants on cost plus basis, the country’s apex decision making body had said. The CCEA had approved the price pooling (of domestic and imported coal) proposal of the coal ministry, amid apprehensions that it is likely to translate into a cumulative impact of over R4,000 crore for power plants and lead to increase in electricity costs by upwards of 13 paise per unit.

The purpose behind price pooling is to have one notified price for each grade of coal, whether domestic or imported .