Power plants in India will continue to receive coal via the MoU (memorandum of understanding) route from the state-run Coal India Ltd (CIL) for the remainder of January 2013. The deadline for CIL to provide coal to power firms had expired on December 31, 2012, but the company has decided to allow another month’s grace period for firms to receive coal via this route.
An industry source informed the media that only those power plants which have been commissioned as of April 1, 2009 will be eligible to receive coal under the MoU route. Firms like NTPC have not yet confirmed fuel supply agreements (FSAs) and this is one of the main reasons for the deadline extension.
The Indian Power Ministry had earlier said that the Ministry of Coal had stated that power plants which had been commissioned until March 31, 2012 could receive the fossil fuel from coal companies via the MoU route, as the FSAs were being confronted with various issues. This would also ensure that power companies would not get affected due to a shortage in coal supply.
After the Indian government had hinted that FSA issues were on the path of being resolved, as many as 35 power firms entered into pacts with the CIL, with the government looking forward to the remaining fuel supply pacts being signed soon.