Coal India releases draft of fuel supply pacts with power sector

Our Bureau Kolkata | Updated on March 12, 2018

Coal India Ltd today released the draft of fuel supply pacts to be entered with power sector. While the penal provisions for not honouring the FSA are kept at abnormally low levels, the coal monopoly has declined to take responsibility of supplying imported coal, in case of lack of response from global suppliers to its tenders.

While imported coal will be supplied only on the basis of firm agreements with such overseas suppliers, failure to supply imported coal due to “global shortage, or delays caused by the supplier or no response to enquiries (by CIL) for supply of coal or logistics constraints in transportation of coal” are included in force majeure act.

The detailed force majeure provisions also include failure of CIL's contractors to deploy equipment and machines.

The company has also declined to take the risk of procedural delays that include delay on the part of the Union or State Government for granting due mining licences or permits, delay in environment and forest clearances and land acquisition.

The power producers are asked to pay six per cent of the annual contracted quantity (ACQ) requirement as interest-free security deposit. Assuming that the total minimum requirement of the FSAs to be signed immediately is 69 million tonnes, the total security deposits amount to a little over Rs 400 crore.

“This FSA is heavily biased against the power sector developers,” said Dr. Ashok Khurana, Director-General of Associated Power producers. The body of private sector power producers have sought Prime Minister's appointment to push their case forward.

Published on April 20, 2012

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