Coal India Ltd on Saturday said that the company was making due progress in effecting fuel-supply agreements (FSAs) with power plants, according to the directive from Prime Minister's Office.

A senior company official told Business Line that draft pacts to supply fuel to nearly 50 power units, commissioned between April 2009 and December 2011, are currently under final stages of scrutiny. According to the statement issued by the PMO in February the coal monopoly was scheduled to enter into such pacts by March 31.

“When compared with our existing 120 FSAs with power sector, we are facing a monumental task of entering into long-term commercial agreements with nearly 50 thermal power units at one go. It has its own legal complications, which need to be sorted out as per the rule of the land and without jeopardising the company's future. CIL, with active support from the Union Coal Ministry, is trying its level best to complete the process as is directed by the PMO,” a senior Coal India official said.

Supply in six months

Reminding that the exercise involves reviewing each of these power projects requiring fuel supply, the source said that things had so far moved according to schedule.

According to sources, Coal India will start supplying coal to power plants in six months from signing the pact.

While the company does not foresee a possibility of resorting to imports to meet the demand, at least in the immediate term, measures are taken to safeguard Coal India's interests in case of force majeure or an untoward incident out of its control.

India's largest power producer, NTPC, was hopeful that Coal India will execute the agreements. “FSA or no FSA, we are getting coal. So we are optimistic that we will keep getting it. There is directive from PMO, so we are hopeful that they (Coal India) will do it,” the NTPC Chairman, Mr Arup Roy Choudhury, said.

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