The Power Ministry has reiterated its stand that Fuel Supply Agreements (FSAs) between Coal India Ltd and power producers are to be signed at 80 per cent trigger level right from the first year.
The Power Secretary, Mr P. Uma Shankar, told the State Power Ministers on Tuesday that Coal India will ensure that supplies at a trigger level of 80 per cent would be made available.
“FSAs will be signed with the same trigger level – 90 per cent plus for incentive and below 80 per cent would attract penalty. The Coal India and Coal Ministry are working on that. And we are quite sure that they will ensure this,” he told the States.
The Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia, said that the real problem is imported coal is more expensive. The solution to this is to put in place a price-pooling mechanism for the coal sector.
“We need a price pooling mechanism…We have raised the issue and we will be pursuing it. Hopefully some progress would be made,” Mr Ahluwalia told newspersons after meeting the State Power Ministers to finalise 12th Five-Year Plan targets.
The Power Secretary’s assurance is in contrast to Coal India’s latest proposal made to the Prime Minister’s Office. On June 22, Coal India apprised PMO that it will supply 65 per cent of the fuel demand for the first three years after signing FSA. The miner will supply 72 per cent of the demand in the fourth year and 80 per cent from the fifth year.
Commenting on the issue, the Coal Secretary, Mr S. K. Srivastava, said that the trigger level in FSAs has been discussed in detail with the Power Ministry.
“We will leave it to the board of Coal India to take a view on this. We will apprise them of all discussions. We share the concern with Power Ministry on a certain trigger level because the viability of power plant and banking and financial sectors are involved,” Mr Srivastava said.
The Coal India board is expected to meet on July 31 to deliberate on FSAs.
“We are trying to take all measures to ensure coal supply and targeting 8.05 per cent growth rate in the 12th Plan for coal production,” said Mr Srivastava.