The ongoing impasse over supply agreements between Coal India Ltd (CIL) and power companies would be resolved this month, Coal Minister Sriprakash Jaiswal said on Wednesday, hoping a decision on whether the state-run coal producer should import the fuel would be taken by month-end.
“About 50 per cent of power units have signed FSAs (fuel supply agreements) till now. We are confident of solving the issue in July only,” Jaiswal told reporters here.
FSAs require CIL to sign contracts with power producers, agreeing to supply at least 80 per cent of the coal requirement of utilities. However, some power companies, including state-run NTPC Ltd, have raised objections against certain terms of FSAs, saying they were designed in favour of CIL.
Till now, 27 of the total 49 power units, including Adani Power Ltd, Rajasthan Rajya Vidyut Utpadan Nigam Ltd and Bajaj Hindustan Ltd, have signed suply pacts with CIL.
The Prime Minister’s Office had stepped in last week following CIL’s request, notifying the coal producer could maintain a trigger level of 65 per cent of power companies’ fuel requirements for the first three years, while from the fourth year onwards, it could be increased up to 85 per cent.
PMO had also asked the company to revisit the controversial penalty clause of 0.01 per cent under which CIL said it would pay a penalty of 0.01% if it fell behind schedule. Power companies say it’s too low.
The CIL board is scheduled to meet on July 10, to discuss and finalise these issues.
“These issues would be discussed in the next board meeting and if we reach some consensus, the board would take a decision,” said CIL Chairman and Managing Director S Narsing Rao.
Jaiswal also said the ministry would take a final call on whether the Kolkata-based CIL should go for imports by the end of this month. Hinting that the ministry was in a dilemma on the issue, the coal minister said: “A decision is not yet taken on whether CIL should import or not. We will come out will a final take on this with in a month.”