Coal India inks fuel supply pacts with 27 more power firms

Coal India Ltd, the world's biggest producer of the fuel which is nonetheless unable to meet India's needs, has entered into fuel supply pacts with 27 power units, including Adani's Mundra Power plant in Gujarat.

The government had earlier this year ordered CIL to sign agreements with power producers guaranteeing to meet 80 per cent of their coal requirements. However, most power companies have been reluctant to sign the agreements, as the penalty on default by CIL amounted to little more than a slap on the wrist.

The report of the signings comes ahead of a meeting convened on Friday by the Prime Minister's Office to iron out issues in the pacts, mainly the penalty clause, which have kept power companies like state-owned National Thermal Power Corp, the country's biggest electricity producer, from signing the fuel supply agreements with CIL.

"So far, CIL has signed FSAs with 27 power units like Adani's Mundra," PTI reported quoting a source close to the development. A few days back the coal PSU had entered pacts with six units of Bajaj Hindustan.

Other power units with whom the coal PSU has signed FSAs include Lanco Anpara Power, Reliance Power's Rosa Power Project and CESC.

The PMO meeting, to be chaired by the prime minister's principal secretary Pulok Chatterji, is likely to be attended by senior coal and power ministry officials besides CIL chairman and managing director S Narsing Rao.