(a) whether Coal India Limited (CIL) has agreed to sign Fuel Supply
Agreement (FSAs) with power companies and if so, the details thereof ;
(b) whether CIL board has agreed on penalty of 0.01% of the value of
shortfall if the supply dips below 80% of the commitment and if so, the
details thereof ;
(c): whether Children’s Investment (TCI) Fund which holds 1% equity
in CIL has opposed FSA but welcomed power penalty and is also pressing for
higher prices; and
(d) if so, the details thereof?
MINISTER OF STATE IN THE MINISTRY OF COAL (SHRI PRATIK PRAKASHBAPU PATIL)
(a): The New Coal Distribution Policy of October 2007 provides
for supply of coal through Fuel Supply Agreements (FSAs). The subsidiary
companies of Coal India Limited (CIL) have so far concluded 154 FSAs with
power plants covering commitment of total quantity of 332.27 Million Tonnes
per annum.
(b): The CIL Board has approved the model Fuel Supply Agreement
for signing with the Thermal Power Stations, commissioned between 1.4.2009
and 31.12.2011 and recommended by the Central Electricity Authority/Ministry
of Power. which are having long term Power Purchase Agreements (PPAs) with
Distribution Companies (DISCOMS). As per this model FSA, there is a penalty
@ 0.01% of the basic value for the quantity supplied below 80% of the
commitment, which is to be effective after 3 years of signing of FSA.
(c) & (d): The Children’s Investment Fund (TCI) has argued that
the existing Fuel Supply Agreement (FSA) system reduces the profits of
CIL and does not pass on the benefit of low coal prices to the end
consumers, and therefore, the FSA system should be abolished or
FSA coal prices should be moved to the market levels.