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'Power cos need not buy from CIL alone'

business Updated: Nov 29, 2012 23:24 IST

Power companies may secure coal from alternative sources in the absence of sufficient supply of the fuel from state-run Coal India, Parliament was informed on Thursday.

"As per the new coal distribution policy of ministry of coal, in order to meet the domestic requirement of coal, Coal India may have to import coal as may be required from time to time," power minister Jyotiraditya Scindia said in a written reply in the Lok Sabha.

He added that developers may also obtain fuel from alternative sources in case of any shortage of assured supply of coal from Coal India.

Earlier this week, the coal ministry had said that Coal India had written letters to power companies seeking their consent for supply of imported coal on cost plus basis under the modified Fuel Supply Agreement (FSA). Cost-plus basis means cost of importing coal by Coal India plus additional charges. Meanwhile, 30 power plants have entered into pacts with CIL, which is likely to enter into pacts with 48 power units.

Power companies waiting to sign the FSA with CIL would have to arrange for 17% of coal on their own either through import or e-auction to run their plants at 85% plant load factor.

CIL proposes to use MMTC or State Trading Company to import coal.