NTPC raises fresh objections to model fuel supply pact

State-owned NTPC has again raised objections to some of the clauses of the model fuel supply agreement to be signed with Coal India Ltd.

“NTPC has again some issues with the model fuel supply agreement (FSA) and it has asked for some changes in the pact,” a source close to the development said.

“The country’s largest power producer has also written to Coal India on the issues it has with the model pact,” the source said.

The source, however, refused, to elaborate on the clauses the power PSU is objecting.

The Government last month had said that most of the issues relating to FSAs have been resolved and power companies are likely to ink fuel supply pacts with CIL in a month’s time.

NTPC did not discuss the issue at its board meeting last month as it stated that it was awaiting clarity on the model pact.

However, CIL had intimated to NTPC about the changes with regard to model FSA soon after its board meeting in December.

Last month, CIL had amended unilateral termination clause of the model FSA, ensuring that the private sector companies are not discriminated vis-a-vis the public sector. Besides, 6 per cent additional security clause was also waived off.

The Prime Minister’s Office (PMO) had issued a directive on December 17 asking power producers to enter into FSAs with CIL within a month. The PMO’s directive came after its November deadline for FSAs was missed amid differences over various issues including the quality of coal.

Earlier this month, the Coal Ministry had said that 35 power firms have so far entered into fuel supply pacts with CIL.

COMMENT NOW