Kolkata: State owned Coal India Ltd (CIL), which has set a target of producing an additional 160 million tonne of coal in the 11th plan, will sign a fuel supply agreement (FSA) with the National Thermal Power Corporation (NTPC) and different state power utilities.
“Both CIL and NTPC have concluded discussion on all clauses under FSA, which is likely to be signed next month. The Union Coal Ministry is also in favour of the FSA,” CIL Director (Technical) N C Jha said.
The FSA would have both penalty and bonus clauses, which would be binding on both parties. “If the supplier fails to supply coal it will pay penalty, while similar penalty will be paid by consumers if they fail to lift coal. There will be bonus clause in the FSA as well,” he said.
He said CIL has now built up a stock of nearly 43 mt against 20 mt, which was the normal stock position, due to power utilities failing to lift the assured quantity of coal.
“CIL planned its production according to projection made in the 11th plan. If it is not adhered to, the company will run the risk of adding up stocks,” he said.
Coal India chairman Partha S Bhattacharya said that the company would produce 160 mt of additional coal in the 11th plan with an investment of Rs18,000 crore, 80% of which would be linked to power.
Bhattacharya said CIL would help sustain an additional 25,000 MW of power in the 11th plan. Currently the company supplied coal to generate 60,000 MW of power.
Jha said, “once we finalise the FSA with NTPC, which is CIL’s biggest customer, it will be replicated for other SEBs. The agreement with NTPC will be a model FSA.”