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Power companies to ink fuel supply pacts with Coal India in a month: Govt

The government has said most of the issues relating to fuel supply agreements (FSAs) have been resolved and power companies are likely to ink the fuel supply pacts with Coal India (CIL) in a month's time.

twitter-logo PTI   New Delhi     Last Updated: December 21, 2012  | 00:00 IST

The government on Friday said most of the issues relating to fuel supply agreements (FSAs) have been resolved and power companies are likely to ink the fuel supply pacts with Coal India (CIL) in a month's time.

After a nearly two-hour long meeting, Coal Minister Sriprakash Jaiswal and Power Minister Jyotiraditya Scindia told reporters that most of the issues related to the contentious FSAs have been resolved.

"Most of the issues related to FSAs have been addressed. The FSAs (between power companies and CIL) are likely to be signed in a month's time," Jaiswal said.

The development comes less than a week after Prime Minister's Office (PMO) directed power producers to enter into FSAs with CIL within a month. PMO directive on December 17 came after its November deadline for FSAs was missed, amid differences over various issues including coal quality.

Noting that discussion were freewheeling and positive, Scindia said: "we are not sitting on the opposite side of the table, we are sitting on the same side of the table... We will be ready to sign the FSAs over the next month".

Both the ministers said that a joint decision has been taken to ensure that there would be no "distinction" on FSAs for public and private power companies.

"We have taken a joint decision that there will be no distinction... Now, the modalities related to those issues, please leave it to the companies concerned," Scindia said.

Private power companies have raised concerns over certain FSA clauses, which they claim are in favour of PSUs.

On the issue of pooling of coal prices, a joint policy by Power and Coal Ministries is expected to be ready in "a week or ten days," Scindia said.

According to Scindia, both ministries would make joint efforts to re-allocate three coal blocks to state-run NTPC.

Regarding pooling of coal prices, Scindia said that discussions are progressing with Coal Ministry. "The policy should be fair, equitable, transparent and a policy that has a longetivity attached to it. Over the next week or ten days, we will come out with a joint policy," he added.

Pooling is a mechanism where by coal price is discovered after pooling domestic and international prices.

On issues related to quality of coal, the ministries have jointly decided that there would be no distinction between public and private power companies.

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