By IANS,
New Delhi : The Prime Minister’s Office Wednesday directed state miner Coal India Ltd (CIL) to sign all fuel supply agreements (FSAs) by November end.
Official sources here said the timeframe for signing FSAs was decided at the PMO’s meeting with senior officials from the coal and power ministries to discuss the issues related to the two sectors.
A question mark hangs over coal supplies from next year to many power companies that are yet to ink FSAs with the coal major.
CIL board has approved a changed penalty clause for the FSA and agreed to pay penalties of 1.5-40 percent depending on the extent the company fails to supply the committed quantity of coal to power utilities.
CIL board had Sep 18 also approved the modified FSA without price pooling with 65 percent domestic coal and 15 percent imported coal at cost=plus basis.
So far, 29 companies have signed the FSA with CIL.
The PMO also reviewed CIL’s production in the first half of the current fiscal and discussed ways to ramp up production over the second half. The meeting included CIL chairman S. Narsingh Rao, among others.
CIL and the Central Electricity Authority (CEA) are to futhur discuss the techniques of price pooling of domestic with imported coal, the sources added.
The PMO-convened meeting also decided that the Inter-Ministerial Group set up to review coal block allocations will be made a permanent body under the Coal Ministry..
Power Minister M. Veerappa Moily said Tuesday that Coal India has agreed to sign FSAs with power generation companies even if they do not have power purchase agreements (PPAs) with distribution firms.
“We had a series of meetings with the coal minister and coal secretary and have sorted out the issue… the signing of FSAs is not going to be a bottleneck in ensuring coal supplies,” Moily had told the annual Economic Editors Conference here.