Coal India modifies FSA to allow third party to test quality

Coal India (CIL) has modified its fuel supply agreement to allow a third party to collect samples and determine the quality of the dry fuel.

The modified provision will be effective after third-party sampling starts, CIL said. It replaces a system of sampling and analysis that was to be conducted jointly by the buyer and the seller of coal.

"Samples of coal shall be collected by third party by manual method during each of the shifts and at each of the delivery points for determining the quality of coal," the state-owned company said on its website.

The third party is an agency that will collect, prepare and analyse coal samples at loading points, it added. Samples of coal will be collected in the presence of representatives of the seller (Coal India) and the purchaser.

"In the event for any reason whatsoever third party sampling and analysis could not be conducted, joint sampling and analysis shall be carried out by the seller in presence of the purchaser at the loading end.

"In the event the purchaser fails or declines to participate in the process of sampling and analysis by the designated third party...Such failure or refusal of the purchaser shall not be considered a ground for disputing the result submitted by the third party, which will be binding on both the parties," Coal India said.

The Coal Ministry had said third-party sampling of coal supplied by CIL is likely to be put in place by the end of this year.

NTPC, the country's largest power producer, had earlier refused to sign FSAs with CIL as it was of the view that the the state-run firm was supplying inferior quality coal.