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CIL may conclude FSA with power companies by March

CIL may conclude FSA with power companies by March
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First Published: Wed, Feb 18 2009. 03 14 PM IST
Updated: Wed, Feb 18 2009. 03 14 PM IST
By PTI
New Delhi: 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% of coal supply under the agreement, CIL intends to fix the trigger-level at 75%.
Bhattacharyya, however, did not rule out considering the demand of the power firms, albeit with a rider.
“(We may) agree at 90% trigger level if annual contract quantity is ratified. If the supply contract of 2007-08 is taken as a benchmark, 90% of that could be the trigger level,” he said.
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First Published: Wed, Feb 18 2009. 03 14 PM IST
More Topics: CIL | PSU | NTPC | Coal India | Fuel |