Coal India to ink fuel supply pact before April 20 (Lead)April 16th, 2012 - 11:46 pm ICT by IANS
Kolkata, April 16 (IANS) Bringing relief to the country’s power sector, Public sector Coal India Limited (CIL) Monday said it would sign a Fuel Supply Agreement (FSA) with power companies before April 20.
The coal major, however, has decided to keep the penalty for failing to supply at least 80 percent of the contracted coal at a minimum level.
Briefing reporters after a CIL board meeting here, its acting chairperson and managing director Zohra Chatterji said: “One of the main agendas of today’s meeting was to implement the government’s directive (on committing a minimum assured fuel supply to the power producers) … we have agreed on a document on which we shall be signing the FSA within the time limit given to us.”
The government on April 3 had issued a presidential directive to CIL to commit a minimum assured fuel supply to the power producers, failing which the company would be subject to paying a penalty.
The directive was issued to the Maharatna company, the world’s largest coal miner, as it did not meet the deadline of March 31, set by the Prime Minister’s Office (PMO) to enter into agreements with power producers as they are facing fuel crunch.
Chatterji said the FSA would be signed before April 20.
“We are to sign it within the 15 days of the issue of directives. So that would be before April 20,” she informed.
On penalty clause for not meeting the agreement, Chatterji said: “We have decided to keep it at a minimum. And it should be operational after three years.”
If the company failed to supply at least 80 percent of the contracted coal, it would pay 0.01 percent of the value of the shortfall as penalty, she said.
On import of coal, the CMD said, “That will be decided later on how imports will have to be handled as and when that is required.
“Imports will have to be decided upon as a separate issue,” she added.
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Tags: agendas, board meeting, chairperson, chatterji, cmd, coal india limited, coal india limited cil, coal miner, crunch, fsa, fuel supply, managing director, penalty clause, power producers, power sector, presidential directive, public sector, shortfall, supply pact, time limit