State-owned Coal India is yet to enter into fuel supply pacts with power plants for 2,560 MW generation capacity. Coal India had been directed to sign supply pacts with power plants for total generation capacity of 78,535 MW to ensure fuel availability.
Out of the 78,535 MW, fuel supply agreements (FSAs) for an aggregate capacity 74,275 MW have been executed by the subsidiaries of Coal India Ltd (CIL), an official said. Another 1,750 MW capacity plants are eligible for supply under memorandum of understanding, but FSAs for 2,560 MW could not be signed till date, the official said.
The supply pacts could not be signed due to various reasons such as clarification of tapering linkages, approval for change of name of the company, refusal of company to sign cost plus agreement and clarification on block allocation.
Tapering Linkage is short-term coal linkage provided to coal consumers. Of the 1,08,000 MW capacity, the government had in 2013 approved signing of fuel supply agreements (FSAs) in respect of 78,535 mw capacity power plants which were already commissioned by then or were likely to be commissioned by March 31, 2015.
Government is considering a policy for coal linkage auction and has sought comments from stakeholders on the draft auction methodology it has prepared, Parliament was informed earlier in the month. An Inter-Ministerial Committee (IMC) was set up in January to consider various models, including auctioning of coal linkages/LoAs (Letter of Assurances) through competitive bidding as the selection process and to recommend the optimal structure that would meet the requirements of all the stakeholders.