Power producers in queue to sign fuel supply agreements with Coal India are in for a setback as the public sector miner is in no mood to tweak any agreement clauses.
The Coal India Chairman, Mr S. Narsing Rao, said that his company is not going to review any clauses of the draft FSA (fuel supply agreement) to be signed with the power producers who have commissioned units till December 2011.
“This is a generic FSA and approved by the Board. This cannot be changed again and again,” Mr Rao told
Earlier this week, Coal India management held discussions with power producers including NTPC on various issues.
“The discussions are on matters related to supply chain, quantity of coal etc. We are not discussing anything on FSAs (with power producers),” added Mr Rao.
Meanwhile, power producers have sought their nodal Ministry's intervention to change few clauses in the FSA that are biased towards Coal India.
Penalty clause
These companies want Coal India to increase penalty clause from 0.01 per cent in case of any supply shortfall and also change other conditions such as discretion to terminate fuel supply agreement, among others.
This has resulted in only few FSAs (about 13) being signed till Tuesday against 38 in line.
According to sources, the Prime Minister's Office is believed to have backed Coal India on the issue.
In February, the Prime Minister's Office asked Coal India to sign fuel supply pacts at 80 per cent requirement for 20 years.