Coal India to consider FSA with power firms on July 31

Amid indications of soon receiving a written communication from the Prime Minister's Office (PMO) in regard to signing of fuel pacts with power firms, Coal India (CIL) board will now meet on July 31 to resolve the supply row with power firms.

The coal giant, so far, has postponed board meetings a couple of times including on July 5 and July 10.

"The PMO had held a meeting on July 6 to resolve the issues impeding fuel supply agreements (FSAs) with power firms.

"We were not able to fix the date for board meeting as we had not received a written communication on the decisions taken in the meeting. Now there are indications the directions will reach us in a day or two. We have fixed the meeting on July 31," a senior Coal Ministry official told PTI.

The expected PMO's intervention would come amidst differences between CIL and power companies, including state-owned NTPC, over certain clauses in the FSAs which were to be completed months ago and has been adversely affecting the power generation due to low coal supplies.

The state-run PSU had fixed July 10 to deliberate on the issues after the PMO meet but had postponed the same.

Sources had said the date of the board meeting had to be carried forward as the Coal Ministry had not received any written communication from the PMO on the decisions taken by it on the issue of assured supply of fuel to the power plants.

Certain clauses of the FSAs, including penalty, had become a bone of contention between the Coal and Power Ministries and eventually the PMO had to intervene to break the deadlock.

The Prime Minister's Principal Secretary Pulok Chatterjee held a meeting on July 6 to take stock of the situation, particularly, relating to the quantum of assured supplies of coal to the power companies.

As per the earlier directive of the PMO, CIL was to supply at least 80% of the committed quantity of the fossil fuel requirements of the power firms.

Citing reasons such as production constraints, CIL had wanted it to be reduced.

The PMO meeting, as per sources, has decided that CIL would supply between 65 and 80% of the requirement of power companies, for which FSAs could be signed.

It was also decided during the meeting that CIL would place coal import order on MMTC or STC. The coal PSU would determine the mechanism for coal price pooling, sources said.