Coal India in pact with 29 power firms

Some firms like NTPC have refused to enter into the pact due to clause of low penalty for CIL in case of it not meeting committment

New Delhi, Aug 5 (PTI) State-owned Coal India Ltd (CIL) has so far entered into fuel supply agreements (FSAs) with 29 power plants, sources said.

"As as of now, Coal India has entered pacts for supply of fossil fuel with 29 power plants," they said.

The power units with whom the coal PSU has signed FSAs include Lanco Anpara Power, Reliance Power's Rosa Power Project, CESC and Adani's Mundra.

Companies including NTPC have refused to enter into pacts with CIL, dismissing the FSA on several counts, including clause of low penalty for the coal major in case of it not meeting the committed supply.

Amid delays in signing of the agreements, the Prime Minister's Office had last month directed CIL to sign the pacts with power firms for supply of 65-80% of the contracted quantity.

CIL had also been asked to look into the possibility of supplying 75-80% of the assured quantity of coal in the second year under a relaxed penalty clause.

"In the third, fourth and fifth year, it could be 80% with strict penalty," it was suggested.

CIL board on July 31 reached a consensus on supplying a minimum of 80% of the contracted quantity of the fuel to power firms, meeting 15% through imports.

As a result, the state-run firm will import around 20 million tonne of coal this year.

However, the board could not reach a consensus on penalty clause, an official had earlier said.