New Delhi: Unhappy with the minimum penalty norms in Coal India's fuel supply agreements (FSA), the Power Ministry has approached the Coal Ministry to change the disputed clauses.
"We are trying ... we are taking up this issue with Coal India and Ministry of Coal. Disincentives are not there for three years and after three years penalty is only 0.01 percent ... we would want it to be changed," Power Secretary P Uma Shankar told reporters at New Delhi.
He said that the ministry is in talks with the Coal Ministry over the penalty clause in fuel supply agreements and hopes to sign pacts with amended conditions soon.
"We hope to finalise the points and also hope to sign the FSA with the conditions that we want," he said.
Coal India had suggested a 0.01 percent penalty on not delivering the fuel in time, but the penalty would only be applicable after three years of signing the pact.
NTPC and many other power companies had refused to ink fuel supply pacts with Coal India, disagreeing with introduction of some clauses in FSAs.
Coal India, which is under the administrative control of coal ministry, has been asked to sign fuel supply agreements (FSAs) with power plants committing a minimum of 80 percent of fuel supply, failing which it would attract penalty.
According to sources in the Power Ministry, "We want to sign the FSA with the earlier clauses."
As per the FSA proposed by the Power Ministry, Coal India would be incentivised for supplying above the 90 percent level. The percentage of incentive would increase with increase in supply.
The same way, it (Coal India), would be penalised for not meeting the minimum supply target of 80 percent and the percentage of penalty would increase with decline in supply.
Meanwhile, Coal India has directed its various subsidiaries to sign the fuel supply pacts with the power producers.
Coal India has nine subsidiaries, including Mahanadi Coalfields Ltd and Eastern Coalfields Ltd.
The current production capacity of Coal India is 436 million tonnes and it plans to ramp it up to 464 million tonnes by 2012-13.


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