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52 power firms fail to meet another deadline for signing FSAs with CIL

25 Jul 2013 Evaluate

The government has recently issued another Presidential directive to state-owned Coal India to enter into fuel supply agreements (FSAs) with power plants for a capacity of 78,000 MW. Still out of the total 131 power plants, 52 of are yet to sign FSA with State-owned CIL, long after the passing of the second deadline set by the Prime Minister’s Office for signing of FSAs by early this year. Only 79 power plants, so far, have entered into the fuel supply agreements with CIL.

The 52 power firms had earlier this year, failed to meet the second deadline set by the PMO for signing FSAs. PMO had in December last year directed that the remaining FSAs should be signed within a month’s time. The directive in December, 2012 came after the November, 2012 deadline for signing of FSAs was missed.

Last year, the Coal Ministry had issued a Presidential directive for the first time to CIL to sign FSAs with the power producers assuring them of at least 80 per cent of the committed coal delivery. Earlier, some power firms including NTPC had refused to enter into FSAs with CIL over quality issues of the dry- fuel supplied to it. NTPC had also stopped payment to Coal India’s subsidiary -- Eastern Coalfields. Responding to that, the world’s largest coal miner had temporarily stopped supply of fuel to NTPC which was resolved later following government’s intervention. Uptill now, NTPC and CIL have inked FSAs for 28 units, with one remaining. While, the companies are yet to complete FSA for a 500 MW joint venture thermal power plant of NTPC and SAIL at Bhilai.

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