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APP accuses that CIL's FSA draft favours PSUs

07 Nov 2012 Evaluate

Not happy with the proposed fuel supply agreements, the Association of Power Producers accused Coal India for its discriminatory treatment to private power producers. The APP blamed that the draft is giving undue benefits to State-owned companies and possess many of the provisions which the industry had opposed.

It also pointed that the option for arbitration regarding FSAs is only allowed to public sector companies, The clauses where Coal India has made separate rules for private and state owned companies include right to terminate FSA, security deposit, suspension of coal supplies and settlement of disputes. While, the centre affirmed that the differentiation in norms are made in order to mitigate risks born by Coal India.

APP also noted that before 2009, FSA for public and private sector generating stations were the same. While the Coal Ministry countered that during 2009, there were hardly one or two power players and all electricity selling power producers were government owned.

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