CIL inks fuel supply pacts with 18 power firms; NTPC reluctant

Coal India Ltd has so far signed fuel supply agreements with 18 power plants for supply of the fuel, since the government mandated that CIL must sign such agreements guaranteeing to meet at least 80 per cent of a power producer's fuel needs, coal minister Sriprakash Jaiswal said today.

However, power producers have reservations about certain clauses of the fuel supply agreement, particularly those related to penalties – they say CIL will go virtually scot free if it fails to meet its obligations. State-owned National Thermal Power Corp, India's biggest power producer, has firmly refused to sign the agreement, and instead is looking for its own sources for coal supply from abroad.

"The fuel supply agreements have been signed with around 18 power plants," Jaiswal told reporters in New Delhi.
Coal India has entered into fuel supply pacts with Reliance Power for its Rosa Power project, Lanco Anpara Power, Bajaj Hindustan, and CESC, among others.

On the timeline for CIL to sign FSAs with all the 48 power units, its chairman and managing director Narsing Rao had said recently that giving a time-frame was difficult.

The model FSA format includes clauses like 80 per cent trigger level and penalty of a mere 0.01 per cent on CIL in case of failure to meet its obligations under the FSA.