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May 21, 2012

Coal India expects to complete the FSA signing within 15 days from now…

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Coal India is expecting to resolve the fuel supply agreement (FSA) deadlock in next two weeks and enter into agreements with all the proposed power plants by first week of June 2012.

 

CIL has prposed to enter into an FSA with 48 power plants which are commissioned between April 2009 and December 2011. Currently around 14 private and public companies have signed  long term FSAs with CIL.

 

However some of the companies are still to sign agreement out of which the public sector power major NTPC is one of them.

 

NTPC is not willing to sign the new FSA proposed by CIL and want certain changes in the same. Out of which the prominent are:

 

  • To have similar penal and force majeure conditions as was in the pacts signed till March 2009.
  • Removal of the stricter force majeure clauses passing the buck on the buyer even for CIL's failure to procure spares and others.

 

However, despite the refusal of FSA signing by NTPC and few others, already some major companies have either initiated the process of signing FSAs or have already entered the pact.

 

These include Lanco, Reliance Power, CESC Ltd and Bajaj Energy.

 

Adani Power, which requires supplies for nearly 1500-2000 MW, is yet to enter into a pact.

 

 

 

 


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