The Power Ministry today said Coal India has agreed to enter into fuel supply pacts with power companies even if they do not have electricity purchase agreements in place.
Power Minister Veerappa Moily said most of the issues related to fuel supplies have been sorted out with the Coal Ministry as well as Coal India Ltd (CIL).
"We have sorted out many things related to coal sector during our recent meetings with the Coal Minister and Coal Secretary," Moily said while addressing the Economic Editor's Conference here today.
Power Secretary P Uma Shankar said "(now) even if the Power Purchase Agreement (between power generator and distribution companies) is not signed by a power generator, the FSA still can be signed (with Coal India)."
He, however, noted that power companies have to furnish Power Purchase Agreement (PPA) at the time when the fuel supply from Coal India starts.
FSAs have been a bone of contention between Power and Coal Ministries and the latest development could provide much relief for power companies.
Meanwhile, Moily said India's Southern Grid would be connected to the National Grid by December 2013, thereby providing a uniform flow of electricity across India.
"By December 2013, the Southern Grid would be integrated with the National Grid, the electricity would be at one frequency," Moily said.
He also said the Planning Commission has approved budget support for the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) scheme in the 12th Plan. The estimated requirement of budget support is Rs 49,730 crore.
The government plans to add close to 18,000 MW during the current financial year, the Minister said.
Speaking on the progress of ultra mega power projects, Shankar said, "The commissioning of the first 660 MW unit of Sasan UMPP in Madhya Pradesh is as per schedule i.E. Beginning of next year."
He, however, declined to comment on the commissioning of Krishnapattnam project in Andhra Pradesh as the matter is in court.
Moily said the decision on 9.5% stake sale NTPC would be taken soon.
The Department of Disinvestment has proposed stake sale of NTPC. With the proposed disinvestment, the government is expected to mop up about Rs 13,100 crore.
The government currently holds 84.50% stake in NTPC and post disinvestment, it would come down to 75%.
