Power Ministry wants Coal India to increase the penalty clause mentioned in the latest fuel supply agreements (FSAs), Power Secretary, Mr P. Uma Shankar, said.
“We want to change the minimum penalty clause (0.01 per cent). We are in talks with Coal Ministry and Coal India. Penalty should be as such that it will work as a disincentive for non-performance. Power companies also feel that 0.01 per cent penalty in fuel supply pacts will not prove to be a deterrent,” Mr Shankar added.
Till now, 15 fuel supply pacts have been sealed between Coal India and power producers that include Rajasthan Rajya Vidyut Utpadan Nigam, Bajaj Hindustan, Lanco, Reliance Power and Adani Power.
A senior Coal India official told Business Line on Tuesday that the miner is ready to sign FSAs with all projects that would be commissioned till March 2015 and have power purchase agreement with state distribution utilities.
According to industry sources, though some of the developers have inked the agreements because of fuel supply constraints, the general consensus is that Coal India is making use of its monopolistic situation.