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Coal India Ltd has modified the model fuel supply agreement (FSA) meant for new power plants, allowing inter-power plant transfer of coal by power companies.
"The CIL board recently approved the amendments in the model FSA that allows inter-plant coal transfer between power plants for both public and private sector generation companies," a Coal India director told PTI.
"This was introduced after there was huge demand from users including NTPC, but with certain conditions," he said.
The CIL amendment led to restoration of inter-plant coal transfer that was in practice prior to the FSA for new power plants, officials said.
CIL's coal transfer is only meant for transfer of coal between power plants either wholly owned by the user or by its 100% subsidiaries, a CIL letter to subsidiaries said.
CIL has not allowed transfer of coal to any joint venture company. CIL has also mandated that transfer is only possible if the FSA is signed by both the generating units and should also have long-term power purchase agreement with power distribution companies.
Power plants having coal blocks are barred from this facility and the total quantity of coal contract will remain same as per the FSA, CIL had said.
Sources indicated this would help the power companies to manage coal between plants for better raw material management for the power plants.
