PMO asks Coal India to sign fuel supply pacts by November-end

NEW DELHI: The Prime Minister's Office has directed Coal India Limited (CIL) to sign fuel supply pacts with power plants that have long- and medium-term sale arrangements with states and power trading companies by November-end.

The decision was conveyed to the state-run coal miner at a meeting called by the prime minister's principal secretary, Pulok Chatterjee, on Wednesday to resolve coal supply-related issues.

"We have been asked by the PMO to complete signing of FSAs by end of November. There are some 50 FSAs that will be signed," Coal India chairman S Narsing Rao, who attended the meeting, told ET. "These 50 include units that have been commissioned since March 2012," he added.

Coal India has so far signed 29 fuel supply pacts with power plants and expects to implement contracts with more utilities, including NTPC and Damodar Valley Corp, soon.

Rao said the generating capacity of the plants signing FSAs is about 25,000 MW, which will require about 125 million tonne of coal. "We will supply 65% of this requirement from domestic production and import the rest," he said.

Coal India, which produced 435 million tonne in 2011-12, is scheduled to increase output to 615 million tonne by 2015-16.

The meeting, which was attended by senior officials including coal secretary SK Srivastava and additional secretary in the power ministry Ashok Lavasa, however, failed to take a decision on price-pooling.

"The power ministry has been asked to come back with further details on the imported coal price pooling," a senior official said.

Power supply pacts between electricity generators and procurers covering more than 12 months are called medium-term power purchase agreements. Long-term pacts are for a period above seven years.

The meeting also discussed the government's responses to the Public Accounts Committee and the Supreme Court on the issue of coal block allocation.

The coal ministry told the PMO that it will begin allocating coal blocks to government companies by the end of November and initiate auction to private companies by December. It was also decided that Coal India would engage international experts to adopt new technologies at large coal mines.