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.
Source: NY Daily News
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