Amid continuous delays over signing of fuel supply agreements, an inter-ministerial panel on coal linkages has considered many cases with regard to signing of FSAs.
“The Standing Linkage Committee (Long-Term) on coal linkages which met a couple of days backs considered a lot of cases with regard to signing of fuel supply pacts,” a Coal Ministry official said.
Some power producers are showing their reluctance to enter into fuel supply pacts with Coal India (CIL) as they don’t have long-term power purchase agreements (PPAs) with them which is mandatory for signing of fuel pacts.
“It is reported that they (power producers) are reluctant to migrate to revised model of FSAs apparently because of the fact that they are not having long-term PPAs,” according to a Coal Ministry document.
CIL, the document said, has signed a few Fuel Supply Agreements (FSAs) with power producers prior to the first Presidential Directive in April 4 last year.
The order made long term PPAs mandatory for power companies for signing fuel pacts.
In FSAs signed prior to April, 2012, there was no mandatory requirement of PPA, according to the Coal Ministry document.
“After April 4, 2012 as well as in the latest Presidential Directive issued on July 17, 2013, long-term PPA with DISCOMs is a mandatory requirement. Therefore, CIL has advised these power producers to migrate to the new model with long-term PPAs,” the document said.
The Coal Ministry had earlier set a deadline of August 31 for signing of FSAs which could not be met. A new deadline of September 6 in this regard was also not met.
So far, Coal India has entered into fuel supply agreements with about 140 power plants. CIL has to sign 173 FSAs for a capacity of 78,000 MW.