New Delhi: The world's largest coal producer Coal India Ltd has so far signed fuel supply agreements (FSAs) with 27 public and private sector power units, including Adani Power Ltd's Mundra power plant in Gujarat state, media reports said citing unidentified sources.
"So far, CIL has signed FSAs with 27 power units like Adani's Mundra," the sources said, adding "A few days back, the coal PSU (public-sector undertaking) has entered into pacts with six units of Bajaj Hindustan."
The move comes even as the Prime Minister's Office is scheduled to hold a meeting with Coal Ministry officials and Coal India on Friday, June 22, to sort out issues related to FSAs, mainly on the penalty clause.
Earlier, the government had asked Coal India to ink fuel pacts with power producers, assuring them of at least 80% of the committed coal delivery and pay penalty between 10% and 40% of the average cost of the shortfall.
Following the directive from the government, Coal India agreed to sign FSAs with power utilities but sharply diluted the penalty provision and said it would pay 0.01% of the value of shortfall in supplies.
However, some power utilities, including the country's largest power producer NTPC Ltd, want to sign the FSAs on the terms of the existing contracts, which stipulate penalty of 10%-40% of the value of the shortfall.
As per the directive, a total of 48 thermal power units, commissioned between April 2009 and December 2011, are slated to enter into fuel pacts with Coal India.
The power units that have already inked fuel pact with the coal producer include Lanco Anpara Power Ltd, Reliance Power Ltd's Rosa Power Project and CESC Ltd.
Coal companies were not able to meet their supply commitments due to shortfall in coal production caused by policy paralysis and mining wrangles.
Fuel supply constraint has dented the power generation capacity of Indian power plants that depend hugely on coal for electricity production. India's power sector consumes about two-thirds of the country's coal output.