Coal India tweaks dispute settlement part in fuel supply pacts

New Delhi: State-owned Coal India (CIL) has tweaked the provision pertaining to the settlement of disputes in the model fuel supply agreements (FSA) for the existing and new state-owned power utilities.

"(There are) modifications in the provisions of model FSAs applicable for the existing and new power utilities (for SEB (State Electricity Board)) and state Gencos," Coal India said in a letter.

[caption id="attachment_1244205" align="alignleft" width="380"] Changing coal policy. Reuters[/caption]

CIL further said in the letter that the provision for 'settlement of disputes' under the model FSA for both existing and new plants was in accordance with the mechanism of Permanent Machinery of Arbitrators (PMA) issued by the Department of Public Enterprises.

"Recently, the Department of Heavy Industries & Public Enterprises modified the dispute resolution provision, replacing the earlier OM (Office Memorandum)," it said.

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"Since earlier OM dated January 22, 2004 has been superseded by the new OM dated June 12, 2013, the FSA provisions...for the model applicable to existing as well as new government/state power utilities, including the corresponding tapering FSA model, will stand modified accordingly," CIL said.

Coal India chairman and managing director S Narsing Rao had recently said the PSU has signed FSA for 70,400 MW.

Amid continuous delays, the Cabinet Committee on Investment (CCI) had earlier said that timelines for signing of fuel supply pacts for power projects of 78,000 MW capacity should be met.

Two deadlines set for signing of the fuel supply agreements by Coal India with the power producers could not be adhered to.

The coal ministry had earlier set the deadline of 31 August for signing of the FSAs which could not be met. Further, the second deadline of 6 September was also not achieved.

PTI