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Logjam over fuel supply broken, say power, coal ministers

Power companies to sign agreement for 7,250 Mw capacity within a month

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The deadlock over the issue of (FSAs) has been broken, according to power minister Jyotiraditya Scindia and coal minister Sri Prakash Jaiswal. The ministers made this announcement after an hour-long meeting today, which was also attended by officials from the two ministries and Ltd (CIL) chairman S Narsing Rao.

The ministers said would sign pacts for 7,250 Mw capacity immediately. Pacts for 3,000 Mw capacity have already been signed.

“We are ready to sign FSAs with CIL right away. Agreements for 7,250 Mw capacity will be signed in a month and 60,000 Mw by 2015. The terms of modified FSAs were discussed today,” said Scindia. The modified FSAs will now have to be approved by the CIL board.

BREAK THE DEADLOCK
  • to get back five cancelled coal blocks
  • Power firms have already signed pacts for 3,000 Mw capacity
  • They will sign agreements for 60,000 mw by 2015
  • The new FSAs will have to be approved by Coal India’s director board

Private power companies led by the Association of Power producers (APP) had recently raised objections over the modified FSA format drafted by CIL, saying the new FSAs were biased against private power companies. “We have decided that there will be no discrimination in the new FSAs,” said Jaiswal, without divulging details.

Private power firms had alleged discrimination in the right to terminate supplies, security deposit and mechanism for settlement of disputes between the supplier and the buyer. They had also questioned the basis of having two separate FSAs for independent power producers and public sector companies.

The five cancelled coal blocks of NTPC will also be restored, said Scindia. The blocks — Chatti Bariatu, Chatti Bariatu (South), Kerandari, Brahmani and Chichiro Patsimal — were cancelled last year due to delays. Re-allocation of the blocks will give a fillip to the company’s plans to double generation capacity to 75,000 Mw by ramping up in-house coal production to 47 million tonne per annum (mtpa), around a fourth of its coal requirement, over the next five years.

“Also, additional coal blocks to support newly planned 8,500 mw capacity projects will be given to NTPC,” said Scindia.

The cancelled blocks have combined reserves of three billion tonnes. The blocks are meant to supply fuel to power plants in Bihar, Uttar Pradesh and West Bengal. Meanwhile, NTPC said that it has floated a tender for a mine development operator for the Kerandari block.

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