CIL signs fuel supply fact with 13 power units

Coal India has so far entered into fuel supply pacts with 13 power units, including Reliance Power's Rosa Power project, while some have refused to sign it objecting the penalty clause.

"Till now Coal India (CIL) has entered into agreements with 13 power units including Rosa Power," a source privy to the development told PTI.

The development comes close on the heels of power sector planning body Central Electricity Authority (CEA) seeking PMO's intervention on fuel supply agreements (FSAs) as a few firms have refrained from entering into pacts with CIL amid differences over penalty to be paid by the coal behemoth if it fails to supply 80% of the contracted fuel to them.

Power producer NTPC is among the companies that have refused to sign FSAs.

So far other power firms with which CIL has entered into pacts includes Lanco Anpara Power and Bajaj Hindustan.

Last month, the government had issued a directive to CIL to commit a minimum of 80% of fuel supply to power producers, failing which it would attract penalty.

The directive was issued following a meeting between the power sector honchos and the Prime Minister's Office.

On when will the Maharatna firm be able to sign FSAs with all the 48 power units, a source with CIL had earlier said: "It is difficult to give a time frame as CIL is signing pacts as and when the power companies are coming forward."

The state-owned firm is likely to enter into pacts with firms having a capacity of less than 30,000 MW.

The model FSA format includes clauses like suspension of supply of coal to power firms if they were found diverting the dry fuel for any purpose other than the specified end-use plant.

It also includes clauses like 80% trigger level and penalty of 0.01% in case of failure to adhere to the agreement.