Reliance Power in fuel supply pact for U.P. plant

Our Bureau Kolkata | Updated on November 16, 2017 Published on May 09, 2012

In an apparent breakaway from the private power producers lobby, Reliance Power entered into fuel supply agreement (FSA) for three units of 300 MW each for Rosa Power in Uttar Pradesh.

Lanco was the other major private producer to have entered the pact in the past.

The private power producers lobby was demanding amendment of the clauses, allegedly biased in favour of the monopoly, in the draft FSA. Sources say that with the exclusion of two major producers, Adani Power is the only major private power producer yet to accept FSA terms.

The Ahmedabad-based company is reportedly in need of CIL supplies for 3-4 units.

Sources told Business Line that the private producers' concern was apparently appreciated by the highest authorities in the Union Government. While anticipation is rife that the Government may suggest the coal major to relax some of the clauses especially the fore majeure conditions to make FSA more palatable to the power lobby, CIL sources did not confirm any move by the Government so far to override board decisions.

Also, some of the private power companies do not have the requisite power purchase agreements in place which is a pre-condition to enter the FSA and is therefore buying time.

MoU supplies continue

Meanwhile, CIL continues supplying nearly 36 million tonnes coal to the power units under memorandum of understandings signed previously. “We (CIL) are not legally bound to continue such supplies once FSA is invited. However, we have decided to continue with the same for the time being,” a source said.

Among the recipients of such supplies are a number of NTPC units which are now expected to enter into firm supply pacts.

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Published on May 09, 2012
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