Coal India board to meet to resolve penalty issue on Tuesday

13 August 2012 | 15:16 Code : 21307 Geoscience events
Coal India is likely to resolve the penalty issue and finalise new fuel supply agreements (FS...

Coal India is likely to resolve the penalty issue and finalise new fuel supply agreements (FSA) in its board meeting on August 7.The Coal India (CIL) board is scheduled to meet on August 7 to discuss and finalise the new FSA. The penalty issue, which remained inconclusive in July 31 meeting is likely to be resolved," a PSU official said.The meeting, which has been preponed from August 13. The venue is also changed from Kolkota to New Delhi.Power firms, including NTPC, have refused to enter into pacts with CIL, dismissing the FSA on many counts including the low penalty clause for the coal major in case of its not meeting the committed supply.CIL board on July 31 reached a consensus on supplying a minimum of 80 per cent of the contracted quantity of the fuel to power firms, meeting 15 per cent through imports.As a result, the state-run firm will import around 20 million tonnes of coal this year.However, the board could not reach a consensus on penalty clause and once it is finalised accordingly a new FSA will be framed, the official said.The Prime Minister’s Office, last month, directed the Coal giant to sign the pacts with power firms for supply of 65-80 per cent of the contracted quantity, amid delays in signing of the agreements.CIL had also been asked to look into the possibility of supplying 75-80 per cent of the assured quantity of coal in the second year under a relaxed penalty clause.In the third, fourth and fifth year, it could be 80 per cent with strict penalty, it was suggested.However, citing introduction of new clauses in the pact, NTPC and many power companies had declined to sign FSAs with CIL.So far, only 29 power plants including that of Lanco, Reliance and Adani, out of 48, have signed FSAs with the state-run coal giant.The government had in April issued a directive to CIL to commit a minimum 80 per cent of fuel supply to power producers, failing which it would attract penalty.


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