Mumbai, May 09 (PW News): Coal India Ltd (CIL) inked fuel supply pacts with 13 power units, including Reliance Power’s Rosa Power Project. However, some firms opposing the penalty clause has completely refrained from signing the pact.

Central Electricity Authority (CEA), the power sector planning body, had recently demanded for PMO intervention on fuel supply agreements, as few firs refused from entering into pacts with CIL. As per the clause in the contracts, a company needs to pay penalty if it fails to supply 80% of the contracted fuel. The firms who refused to ink the pact involves majors like NTPC Ltd. While the companies who inked the deal involves leading players like Lanco Anpara Power, Bajaj Hindustan etc.

Power producer NTPC is among the companies that have refused to sign FSAs. “It is difficult to give a time frame as CIL is signing pacts as and when the power companies are coming forward,” informed a source from the industry, when asked about the final completion of FSA deals with 48 power units.

CIL is expected to ink pacts with firms having a capacity of less than 30,000MW.

The government had issued a directive to CIL last month asking to commit a minimum of 80% fuel supply to power producers through FSA contracts. The FSA model format includes clauses like suspension of coal supply to power firms if they were found diverting the dry fuel for any purpose other than the specified end-use plant. The deal further involves clauses like 80% trigger level and penalty of 0.01% in case of failure to adhere to the agreement.

PW News Bureau