At least four public sector thermal power units have already entered into pact with Coal India Ltd. This is as a result of finalising the draft fuel supply pact on April 20. Another four odd units are expected to complete signing the FSAs by this evening, according to the Director Technical of the company, Mr N. Kumar.

The interest shown by the public sector is in contrast to the allegations levelled by the private sector against CIL for ignoring the interest of power lobby. “This draft FSA is heavily biased against the power sector developers,” Dr. Ashok Khurana, Director-General of Associated Power Producers told Business Line on April 20.

The private power producers' lobby has sought Prime Minister's appointment to push their case forward.

Talking to newspersons on Tuesday, Mr Kumar said that FSAs were yet to be signed with NTPC units as the power major has raised objections against GCV-based pricing mechanism. “NTPC is not ready to accept GCV-based classification of coal for the existing as well as future FSAs. The issue is being negotiated,” he said.

Binding conditions

CIL Board in a meeting on April 16 had recommended flexible penal provisions for not honouring the FSA. The monopoly has declined to take responsibility of supplying imported coal, in case of lack of response from global suppliers to its tenders.

Binding conditions were also imposed on pricing of such imported coal. And, in case the power sector denies to lift the imported content, as part of the FSAs, they will not be replenished by domestic coal.

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.

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