This is the question IIM-Ahmedabad director Samir Baruah, as an independent director on the CIL board, has raised ahead of a crucial management meeting on Friday to approve the model FSA.
"It would be myopic for (CIL) board to believe that coalgate has nothing to do with signing of FSAs. FSAs are clearly designed to bestow favours to chosen projects and producers of power. If they also appear to be those who received largesse from the government in terms of allotment of coal blocks then we would also be guilty of favours to the same set of projects/owners," Baruah wrote in an e-mail to CIL company secretary M Viswanathan on August 28.
The government had on April 3 taken the unusual step of issuing a presidential directive to CIL to sign FSAs with power projects guaranteeing to supply 80% of the contracted quantity or pay hefty penalty to project promoters. The directive was issued after the six independent directors, including Baruah, had blocked the FSA, doubting CIL's capability to meet the minimum supply guarantee.
Baruah has copied his e-mail to CIL chairman S Narsing Rao and other directors. He has also asked the company for "the entire list of power projects and owners of these projects who would be the customers for coal under FSAs" and another list of projects/owners who were allotted coal blocks by the government.
A comparison of the two lists would weed out whether same projects or promoters figure in the two lists and enjoying government largesse twice over. This is evident as Baruah puts the following posers before the CIL board:
a) "The conditions specified while allotting coal blocks - were they required to start production by certain date? What were these dates?
b) What is the status of these blocks? Has mining started in these blocks?
"There appears to be some confusion as to when these blocks were allotted. Were all the blocks allotted between 2006 and 2010, or were there some blocks that were allotted after 2010?"
The FSA and the minimum supply guarantee had been a contentious issue for the government. Pushed by private power producers, the Prime Minister's Office (PMO) has been pushing hard for signing of the FSA with the aim of rescuing projects that were either ready by December, 2010, or were expected to be commissioned by March, 2015, and have long-term power purchase agreements in place.
But opposition from independent directors and dispute with power producers over certain clauses has held up the agreements. Some 65 power projects with an aggregate 28,000 mw of generation capacity are awaiting agreement. The decision to ask CIL to sign the FSA was taken at the February 1st meeting of the PM's panel of secretaries set up to address power sector woes and was first reported by ToI on February 2nd .
"It would be myopic for (CIL) board to believe that coalgate has nothing to do with signing of FSAs. FSAs are clearly designed to bestow favours to chosen projects and producers of power. If they also appear to be those who received largesse from the government in terms of allotment of coal blocks then we would also be guilty of favours to the same set of projects/owners," Baruah wrote in an e-mail to CIL company secretary M Viswanathan on August 28.
The government had on April 3 taken the unusual step of issuing a presidential directive to CIL to sign FSAs with power projects guaranteeing to supply 80% of the contracted quantity or pay hefty penalty to project promoters. The directive was issued after the six independent directors, including Baruah, had blocked the FSA, doubting CIL's capability to meet the minimum supply guarantee.
Baruah has copied his e-mail to CIL chairman S Narsing Rao and other directors. He has also asked the company for "the entire list of power projects and owners of these projects who would be the customers for coal under FSAs" and another list of projects/owners who were allotted coal blocks by the government.
A comparison of the two lists would weed out whether same projects or promoters figure in the two lists and enjoying government largesse twice over. This is evident as Baruah puts the following posers before the CIL board:
a) "The conditions specified while allotting coal blocks - were they required to start production by certain date? What were these dates?
b) What is the status of these blocks? Has mining started in these blocks?
"There appears to be some confusion as to when these blocks were allotted. Were all the blocks allotted between 2006 and 2010, or were there some blocks that were allotted after 2010?"
The FSA and the minimum supply guarantee had been a contentious issue for the government. Pushed by private power producers, the Prime Minister's Office (PMO) has been pushing hard for signing of the FSA with the aim of rescuing projects that were either ready by December, 2010, or were expected to be commissioned by March, 2015, and have long-term power purchase agreements in place.
But opposition from independent directors and dispute with power producers over certain clauses has held up the agreements. Some 65 power projects with an aggregate 28,000 mw of generation capacity are awaiting agreement. The decision to ask CIL to sign the FSA was taken at the February 1st meeting of the PM's panel of secretaries set up to address power sector woes and was first reported by ToI on February 2nd .
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