CIL fails to get price-pooling board approval

A seven-hour meeting of the Coal India Board today failed to approve the price-pooling mechanism following differences among directors, a development which is likely to block implementation of the modified fuel supply agreement (FSA) with power producers.

"The Board has asked the management to come back with a business model for price pooling," CIL chairman S Narsing Rao told reporters confirming that the board failed to approve the price-pooling.

He said, the Board approved FSA with 65% domestic coal and cost plus for 15% imported coal supply to meet 80% supply trigger level.

"FSA is more or less over. FSA is different from price-pooling. Price pooling is a mechanism to implement FSA," Rao said.

"If price pooling is approved, then 15% supply of imported coal will be not in the cost plus method, but in pooling mechanism," he added.

He said cost impact of price pooling has been appraised by the Board.

Rao did not gave any timeline by when the business model will be finalised.

The business model will carry details like how CIL aimed to implement price pooling, vat and billing system.

Rao declined to comment on the reported email by CIL independent Director S K Baruah to the directors that it would be myopic for the board to believe that Coalgate had nothing to do with the signing of FSAs.