PMO scales down target for CIL on fuel supply to power units

The PSU firm has also been asked to go in for coal imports through the state-owned agencies like the STC and MMTC, sources said.

CIL had its way in terms of making much less commitment for assured supply of 65 per cent for the first three years of the fuel supply agreements (FSAs) from 80 per cent, as directed by the Prime Minister's Office (PMO) earlier.

But in the fourth year, the supply has to increase to 72 per cent followed by 80 per cent in the fifth year of the agreements, sources added.

However, the company will have to pay damages, equivalent to 10 per cent of the value of the shortfall in supply to the power producers. Besides, there would be no moratorium on payment of penalty.

The directions to the monopoly supplier CIL 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.

CIL which accounts for over 80 per cent of the domestic coal production will take the PMO directions before its board, which is likely to meet next month.

"We will now be having board meeting of Coal India. They may take a final view on all these issues (penalty, FSA, coal imports)," Srivastava told reporters today after the meeting.

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.