New Delhi: The government is understood to have directed Coal India Ltd (CIL) to supply fuel at an 80 percent "trigger" level to the power sector or face the music.
The move comes within days of Prime Minister Manmohan Singh assuring chiefs of power companies that issues facing the sector, including fuel shortages, will be addressed soon.
Sources said that the decision was taken at a meeting of Committee of Secretaries, headed by Prime Minister's Principal Secretary Pulok Chatterjee. CoS has the mandate to find "practical, pragmatic and viable solutions" for the power sector within a given time frame of 90 days.
The Committee was constituted after several power sector honchos, including Ratan Tata and Anil Ambani, complained to Singh on January 18 that acute shortages of coal and natural gas have marred the growth of power sector and many projects are stranded.
"It was decided that Coal India will sign fuel supply agreement at full LoA (letter of allocation) quantity, below which it would be penalised," said a source.
Sources said the CoS has also decided that the largest coal producer will immediately sign the fuel supply agreement (FSA) with all power plants commissioned till December 31.
Besides, the same treatment will be given to new plants that are ready for commissioning -- with an estimated capacity of 60,000 MW -- by 2014-15.
According to a government estimate, the country would witness a shortfall of 137 million tonnes of coal in the current fiscal.
However, CIL has been crying foul over the issue for last many months as it could not increase its production for want of environmental clearances. The company has kept its production target for the current fiscal to 440 million tonnes, just a marginal increase over 2010-11 levels.