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Coal firms told to supply fuel to power plants based on MoU

The Coal Ministry, on Thursday, directed coal companies to continue with the fuel supplies to power plants, which have been commissioned this year through the memorandum of understanding (MoU) route, till issues relating to the fuel supply agreement (FSA) are resolved.

The latest government directive is likely to benefit as much as 8,800 MW of electricity generation capacity that has come up in the first three months of 2012. This will bring relief to a large number of areas that are now faced with shortage of power during the current summer season.

“The Ministry of Coal has issued a directive to coal companies to supply coal to power plants commissioned till March 31, as well as those to be commissioned during 2012-13 through the MoU route as the FSAs are getting delayed,'' the Power Ministry said in an official statement issued here. With this directive, the commissioned plants would be able to generate power without facing disruption of coal supply, it added.

Tough a memorandum of understanding was not a legally binding document, the route would be used till the issues regarding the FSA were resolved, the statement added.

Concerned over the delay in signing FSAs, the Power Ministry had taken up the issue of ensuring fuel supply to power plants with the Coal Ministry. Power Minister Sushil Kumar Shinde had even petitioned the Prime Minister's Office (PMO) on the issue.

The statement further said the Ministry of Coal was requested to issue a directive to coal companies to ensure supply of coal to power units, which had been commissioned or were likely to be commissioned this year. The quantity of coal to be supplied to these power plants would be decided in consultation with the Central Electricity Authority (CEA) till the FSAs for these projects were signed.

Most power companies have expressed their concerns over certain clauses such as those related to penalty in the revised FSA mooted by Coal India Ltd. The CEA, on Wednesday, held discussion with major power producers to get their views on the FSA.

During their meeting with the CEA, power producers also raised concerns over the force majeure as well as the penalty clauses in the new FSA. Representatives from about 30-35 power generation companies attended the meeting.


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Printable version | Jan 18, 2022 2:06:20 PM | https://www.thehindu.com/business/coal-firms-told-to-supply-fuel-to-power-plants-based-on-mou/article3405217.ece

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