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NTPC to sign FSAs with CIL within a month

Both the parties have agreed to bury their differences over the revised draft of FSAs

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Power major has decided to sign fuel supply agreement (FSA) with Coal India with in a months time.

Both the parties have agreed to bury the differences over the revised draft of FSAs, in a meeting held at Kolkata today, in which the chiefs of both the public sector undertakings, S Narsing Rao of and Arup Roychoudhury of NTPC were present.

"Both parties have discussed various issues. Next meeting is likely to be in January. I see we can sign FSAs probably with in a month. Both firms have to go back to the board with the respective decisions today," Roychoudhury said. CIL board meeting is on December 12 and NTPC board will meet on December 26.

The power major accounts to more than 35% of the quantity that CIL has to supply under the new FSA.

The Kolkata-based coal major was able to sign only 33 FSAs till now, despite a deadline set to power companies by the Prime Minister’s Office, to sign the pacts by November end, even if they don’t have binding pacts for power sale

Total 49 units set up between July 2009-December 2011 and another 81 more units, that are and to be commissioned between January 2012 and March 2015, are supposed to sign FSAs with CIL.

Following protests by power firms, CIL has revised penalty slabs in the current structure, doing away with moratorium. The board has also approved cost price model for signing of FSAs, which will provide imported coal at actual cost. CIL had also agreed for a penalty ranging from 1.5% to 40% on failure to meet supply commitments.

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