After a long quarrel, NTPC and Coal India have finally agreed to sign new fuel supply agreements (FSA). However, the FSA will be signed on most of the terms of 2009 MoU except the trigger level.
The trigger level is the point up to which Coal India has to meet the supply commitment.
In the recent FSA being signed, the trigger level has been reduced to 80% from the earlier 90%.
NTPC clarified the concerns about whether NTPC is getting preferential treatment by saying NTPC’s case was different from other private developers who are opposing Coal India’s new FSA. NTPC has to sign new FSAs for its brownfield projects unlike others who have greenfield projects.
Under the said terms, FSA for around 4,300 MW capacity will be signed for which NTPC was getting coal based on a MoU with Coal India.
POINTERS: Contentious issues
- Penalty clause reduced to 0.01 per cent
- For three years from the date of signing of FSA, there will be no compensation.
- For non agreement during review, aggrieved party can terminate the agreement.
- For non acceptance of change in coal distribution system CIL has right to terminate the agreement.
- No provision for inter project transfer of coal for efficient operation
- No provision for re-declaration of grade.
- Force Majeure events
More Literature on this topic:
- http://www.thehindubusinessline.com/industry-and-economy/article3443274.ece?homepage=true&ref=wl_home
- http://mmb.moneycontrol.com/india/messageboardblog/message_thread/10859271/12659271
