Calcutta, Oct. 5: The Damodar Valley Corporation is likely to sign a modified fuel supply agreement (FSA) with Coal India to avoid shortages.
"Coal supply is an issue. At present, we require about 70,000 tonnes per day to generate about 4,500 MW of power. By the beginning of 2013-14, the requirement would go up to 1,12,000 tonnes per day to generate over 7,000 MW following several capacity additions," DVC chairman Rabindra Nath Sen told The Telegraph.
"We are discussing whether to sign the modified FSA. Although there are still areas of concern, we have a limited choice. We can either sign and get coal to produce more power or we do not sign and wait," Sen said.
NTPC, the largest coal consumer, along with the DVC and several other power producer, had raised objections to the proposed FSA by Coal India. Since then, the miner had made changes in the penalty and force majeure clauses.
Last month, the Coal India board had approved the revised pact under which it would provide an assured supply of 65 per cent domestic coal and 15 per cent imported coal on a cost plus basis to units commissioned after April 2009.
NTPC is reported to have agreed to sign the modified fuel pact, while the DVC and other producers are likely to follow suit. So far, 29 power companies have signed the supply pacts.
The DVC meets about 10 per cent of its requirement from its two mines at Barjora (north) in Bengal and Bermo in Jharkhand. It imports about 20 per cent, while a large part is sourced from Coal India.
"We plan to step up production from our mines at Barjora, Khagra-Joydev, Saharpur-Jamarpani and Gondulpara in phases, which will take time. We have also asked the ministry of power for allocation of more coal blocks," Sen said.
According to Sen, issues such as grade slippages and compensation for stone content are yet to be streamlined. "There have been instances where the coal we are getting is much inferior than what we are paying for. Also, the stone content is sometimes as high as 20 per cent," he said.