CIL board may meet on July 5 to finalise fuel supply pacts

Amid CIL being asked by the PMO to sign pacts with power producers with assured minimum supply of 65% of the commitment, the board of the PSU firm is likely to meet on July 5 to take a final call on the issue and to firm up changes in penalty clause of new model FSAs.

"Coal India (CIL) board may meet on July 5 to take a final view on the issues related to model Fuel Supply pacts, including penalty clause," a top official in the Coal Ministry told PTI.

Last week, the Prime Minister's Office (PMO) had also asked CIL to go in for import of coal through the state-owned agencies like the STC and MMTC. The coal major would take up the PMO's directions on import of coal before the  board.

The PMO had also asked CIL to go back to penalty that existed before 2009, instead of 0.01% as per the new fuel supply agreements (FSAs), and do away with the three-year moratorium on penalty if the coal major failed to supply the fuel to the power producers.

"The amendments in the penalty clause will also come up before the board," the official said.

The PMO has directed CIL to provide assured supply of 65% for the first three years of the FSAs instead of 80% directed by it earlier in April.

But in the fourth year, the supply has to increase to 72% followed by 80% in the fifth year of the agreements.

The directions to the PSU firm were given after Pulok Chatterjee, Principal Secretary to the Prime Minister, took a meeting of Coal Secretary S K Srivastava and CIL Chairman and Managing Director S Narsing Rao last week.

"We will now be having a board meeting of Coal India. They may take a final view on all these issues (penalty, FSA, coal imports)," Srivastava had said earlier.

CIL, which missed the revised production target last fiscal and produced 435 million tonnes of coal, has set a production target of 464 MT for 2012-13.