CIL may divert fuel from PSUs to power cos if needed: Government

Coal India may divert fuel supply from PSUs, that have not commissioned their end-use plants, to power plants in case of any shortfall in fulfiling commitment under the supply agreements from its own production.

In a written reply to the Lok Sabha, Minister of State for Coal Pratik Prakashbapu Patil said, “In case of any shortfall in fulfilling the commitment under the FSAs from its own production, CIL may arrange for supply of coal … through arrangements for obtaining coal from State/Central PSUs who have been allotted coal blocks and have started production … but have not commissioned their end use plants.”

To a query if CIL would be able to supply the stipulated quantity of coal to the said FSA holders, Patil said, “Yes sir. The estimated coal production will be adequate to meet the demand of the said FSA holders.”

The government may ask consumers of coal such as steel and cement companies which are yet to start operations to divert their quantity of the fuel to meet power sector’s demand.

The Prime Minister’s Office had recently stated that CIL will sign fuel supply agreements (FSAs) with power plants that have entered into long-term power purchase agreements with distribution companies and have been commissioned or would get commissioned on or before March 31, 2015.

A few days back, Patil had said CIL might divert a portion of the coal meant for e-auction to power plants.

The decision, he had said, was taken following a meeting held in Prime Minister’s Office to discuss the issues relating to coal shortage and finding out ways to meet the requirement of the fossil fuel of the power sector.

Under e-auction, coal is sold at spot market price. In order to provide relief to the fuel-starved power sector, it was decided that CIL will sign by March end agreements for supply of fuel to power projects commissioned up to December 2011
Source: ET

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