PMO asks power firms to sign fuel supply pacts within a month

NEW DELHI: The Prime Minister's Office (PMO) today set a one-month deadline for the public sector power companies, including NTPC, to sign fuel supply pacts with Coal India ( CIL) failing which FSAs would be withdrawn.

"The PMO has asked Power Ministry to direct power PSUs to sign fuel supply agreements (FSAs) with CIL within a month from today, else fuel supply pacts would be withdrawn," sources told PTI.

The direction from the PMO came during a meeting held under the Chairmanship of Principal Secretary to Prime Minister Pulok Chatterjee.

The meeting was attended by Coal Secretary S K Srivastava, Power Secretary P Uma Shankar and Coal India Chairman and Managing Director S Narsing Rao among others.

Country's largest power producer NTPC is among the companies that have raised concerns about quality of coal.

Recently, NTPC Chairman and Managing Director Arup Roy Choudhury had said that "the quality of coal that we received from Coal India is poor and we have informed the Power Ministry about that".

The PMO had in October asked power companies to sign the fuel supply pacts with Coal India by November-end even if they don't have binding pacts for sale of electricity.

The PMO had convened a meeting to sort out issues impeding signing of FSA between CIL and power producers.

A total of 33 power units having a capacity of 9,671 MW have entered into modified fuel supply agreement (FSA) with Coal India (CIL) so far.

Earlier, the government issued a Presidential Directive to CIL to sign FSAs with the power producers assuring them of at least 80 per cent of the committed coal delivery.

In September, the CIL board had approved the modified FSA without price-pooling with 65 per cent domestic coal and 15 per cent imported coal at cost plus basis.

Cost-plus basis means cost of importing coal plus additional charges.