Power, coal firms lock-horn over FSA

Power, coal firms lock-horn over FSA


New Delhi: The fuel supply agreement between power utilities and Coal India for assured supply of the raw material has hit a roadblock with the former denying to ink the pact sans necessary changes.

“We won’t sign the Fuel Supply Agreement (FSA) if the company (CIL) cannot assure 90% of the committed coal supply to us," NTPC Chairman and Managing Director R S Sharma told PTI.

As per the New Coal Distribution Policy, companies requiring over 4,200 tonnes of coal annually, need to enter into FSA with Coal India.

Of about 1,400 companies from power, steel, cement and sponge iron sectors, nearly 1,100 are believed to have entered into FSA with Coal India.

Much to the discomfort of CIL, however, only seven power units out of the total 25 are said to have inked the pact.

“Unless companies sign FSA, we will not be able to know their exact coal requirement, which may later create problem for us in supplying the raw material," a CIL official said.

On their parts, the power companies have refrained from signing the agreement over fixing of the ‘trigger level´ or the level of supply below which CIL has to pay a penalty.

Not buying the idea, CIL said the power companies demand for ‘trigger level´ was unjustified.

“Power utilities do not have enough coal on account of their inability to meet the import targets and thus they want the ‘trigger level´ to be set at about 90% of the supply, which is unjustified," a top CIL executive said.

Even as power utilities and CIL lock-horns over the FSA, government has decided to review the arrangement.

“We will review the FSA and may bring in a few amendments to it. We are talking to the power companies at present and are aware of their demands," Coal Secretary H C Gupta said.