CIL may ink supply deals with power co by March

Power utilities, led by Navratna PSU NTPC, are likely to ink the assured fuel supply agreement with Coal India by March, a development that would put to an end months-long deadlock between the firms of the two sectors.

"The fuel supply agreement (FSA) is likely to be (signed) by March (as) a lot of breakthrough has been made," Coal India Ltd (CIL) Chairman Partha S Bhattacharyya told reporters today on the sidelines of a conference here.

The FSA is a long-term pact between coal producers and consumers aimed at ensuring a dedicated supply of fuel. It has been delayed by a few months due to differences over fixing of a "trigger level".

Trigger level is the minimum assured level of coal supply and offtake, failing which both the parties attract penalty. While power companies want assurance for 90 per cent of coal supply under the agreement, CIL intends to fix the trigger-level at 75 per cent.

Bhattacharyya, however, did not rule out considering the demand of the power firms, albeit with a rider.

"(We may) agree at 90 per cent trigger level if annual contract quantity is ratified. If the supply contract of 2007-08 is taken as a benchmark, 90 per cent of that could be the trigger level," he said.