Coal India, NTPC iron out differences, fuel pact likely by mid-Jan

Dec 10 2012, 21:27 IST
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Coal India. (Agencies) Coal India. (Agencies)
SummaryAfter prolonged wrangling, power generator NTPC and coal producer CIL have thrashed out their differences.

After prolonged wrangling, power generator NTPC and coal producer CIL today appeared to have ironed out differences over the fuel supply agreement (FSA) and said the pact will be signed in a month's time.

"We have discussed the issues threadbare. Many of the issues can be thrashed out and we can sign the FSAs very soon...possibly in a month's time," NTPC CMD Arup Roychoudhury said after a meeting with Coal India chief S Narsing Rao here.

The two PSUs had locked horns over the FSA. The main differences were minimum supply level and quality of the coal. They were also not on the same page on the issue of signing different FSAs in case of multiple units of the same plant.

Responding to queries, Rao, who was present during Roychoudhury's media briefing, said there will be no change in the draft of the FSA.

This could mean that NTPC may have to scale down their demands.

According to sources, NTPC is not happy with signing two sets of FSAs for plants in brownfield capacity expansion.

Sources said Coal India had agreed to look into the issue on a case-to-case basis.

The signing of the FSA is expected to be held in Delhi where the next meeting is scheduled for in mid-January.

Today's understanding may have to be approved by the two respective boards. The CIL board is meeting on December 12 while that of the NTPC is slated for December 26.

As per a Presidential Directive to Coal India in April, the PSU has to supply a minimum 80 per cent of contracted amount to power companies under the FSA.

CIL has been able to sign only 33 FSAs till now.

The Prime Minister's Office had set a deadline for power companies and CIL to sign the FSAs by November.

The companies also discussed the issues of Gross Calorific Value and Useful Heat Value-based supply. But, this was not part of the FSA discussion. Power companeis were against gross calorific value based pricing.

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