CIL Board to meet tomorrow to discuss fuel supply pacts

The meeting, scheduled to be held in Kolkata, may also discuss pooling of coal prices

The Coal India Board is going to meet tomorrow to deliberate on the issues related to signing of the fuel supply agreements (FSAs) with power firms, including coal imports and changes in the penalty clause of new FSAs.

The Board meeting, scheduled to be held in Kolkata, may also discuss pooling of coal prices in case the state-owned coal producer goes for imports of the dry fuel to meet the demand, sources said.

The two issues, supply of minimum assured coal supply to power firms and penalty to be paid by the Coal India for not supplying the minimum stipulated quantity, have held up signing of FSAs for many months nows. Even the intervention of the Prime Minister's Office (PMO) has failed to resolve the deadlock so far.

While Coal India says it can not guarantee more than 65% of required coal as minimum assured supply, power producers have been pitching for keeping it at 80% levels.

In a meeting held on July 6, the PMO is believed to have directed power companies and Coal India to sign the pact at 65% of the total coal contracted for the current financial year. Besides, it had also suggested increasing the minimum supply level to 80%, gradually in about four years.

However, the state-owned coal producer had postponed its Board meeting twice this month on the pretext of not receiving the written communication from the PMO on the decisions taken in that meeting.

The Power Ministry, on behalf of the firms in the sector, has suggested that Coal India should go for imports to meet the shortages in domestic supplies. It had also asked for pooling of the price of imported and domestic coal to neutralise the impact of higher prices of imported coal.

According to the official data, only 27 power plants, of 48 in all, have so far signed the supply agreements with the state-owned coal giant. These include Adani's Mundra Power plant, Lanco's Anpara Power, Reliance Power's Rosa Power Project and CESC.