Coal India board meeting postponed likely on July 17

Meeting had to be carried forward as the Coal Ministry was yet to receive a written communication from the PMO regarding assured fuel supply

The board meeting of Coal India Ltd (CIL) scheduled for tomorrow to deliberate on the issues relating to signing of the fuel supply pacts with power firms, has been postponed and is likely to be held on July 17.

"Due to unavoidable circumstances, the...Meeting of board of directors of CIL which was scheduled to be held on Tuesday the 10th July, 2012 is hereby postponed. Next date, time..Of the meeting will be intimated later," Coal India said in a notice.

According to a source in the Coal Ministry, the date of the board meeting had to be carried forward as  "the Coal Ministry is yet to receive a written communication from the Prime Minister's Office on the decisions taken by the PMO with regard to assured supply of fuel to the power plants and several other issues relating to fuel supply agreement in a meeting held on Friday."

According to sources, CIL board is likely to consider the issues related to the Fuel Supply Agreements (FSAs), including the minimum assured supply of fuel to power firms, when it meets on July 17.

Certain clauses of the FSAs, including penalty, became a bone of contention between the Coal and Power Ministries. Eventually, the Prime Minister's Office (PMO) had to intervene to break the deadlock.

Last week, the Prime Minister's Principal Secretary Pulok Chatterjee held a meeting to take stock of the situation and address the issue. This was, particularly, relating to the quantum of assured supplies of coal to the power companies.

As per the earlier directive of the PMO, CIL was to supply at least 80% of the committed quantity of the fossil fuel requirements of the power firms. Citing reasons such as production constraints, CIL had wanted it to be reduced.

The PMO meeting held last week decided that CIL would supply between 65 and 80% of the requirement of power companies, for which FSAs could be signed.

It was also decided during the meeting that CIL would place coal import order on MMTC or STC. The coal PSU would determine the mechanism for coal price pooling, sources said.