CIL modifies provisions in fuel supply pacts with power plants

Coal India Ltd (CIL) has made changes with regard to certain provisions of model fuel supply agreement (FSA) applicable to new power plants.

CIL said modifications in the model FSAs would be applicable not only to new power plants but also to new non-power consumers, adding that "references were also received in this regard (changes in model FSA) from the subsidiary coal companies."

"It was discussed (during the meeting) that suitable modification in respect of certain provisions of the new power FSA models are required... Accordingly certain provisions in the model FSAs applicable to the new power plants are modified," Coal India said in a letter to its subsidiaries.

The modifications includes with regard to power purchase agreement and compensation for oversized stones, among others.

So far 60 power generation companies have signed FSAs with CIL.

The development comes at a time when quality of coal has become a contentious issue between CIL and another state-run companies - National Thermal Power Corporation (NTPC).

NTPC had refused to sign the FSA with CIL saying the quality of coal supplied by the coal PSU was poor and could even cause damage to its machinery.

Earlier this month, CIL snapped supplies at a few NTPC stations as the former alleged that the power producer was not making regular payments to the company.

"NTPC power plants need coal of minimum 3,100 kilocalories but CIL at times has supplied coal with average heat generating capacity of about 2,100 kilocalories," according to the power company.

With inputs from PTI