Coal India to ensure 80 per cent of fuel needs of power companies
31 Jul 2012
Coal India Ltd (CIL) has finally agreed to the 80 per cent trigger limit for signing fuel supply agreements with power producers, on condition that 15 per cent of the fuel will be imported and the coal supplies would be priced accordingly.
The board of directors of Coal India Ltd today approved a revision of the fuel supply agreements with 80 per cent trigger, allowing for penalty if supplies fall below the trigger.
The board meeting, held in Kolkata, broadly agreed to pooling of coal prices in case the state-owned coal producer goes for imports of the fuel to meet demand, according to chairman Narsing Rao.
A decision on penalty and details of price pooling mechanism will, however, be decided in the next board meeting, expected in the first fortnight of August.
The two issues, supply of minimum assured coal supply to power firms and penalty to be paid by Coal India for failure to supply the minimum stipulated quantity, have held up signing of FSAs for many months now.
Even the intervention of the Prime Minister's Office (PMO) has failed to resolve the deadlock so far.
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