Has agreed to review the April 16 decisions
The board meeting of Coal India Ltd. (CIL) to consider the fuel supply agreement (FSA) issue remained inconclusive on Tuesday even after a three-hour meeting although the ice has been broken on the issue of recasting the decisions taken at the April 16 meet.
Another meeting is proposed to be called soon to act on the advisory sent by the Ministry to CIL. The advisory sent on July 23 asked the PSU to resolve the FSA issue while also deciding on the pool price mechanism.
CIL Chairman S. Narsing Rao, who took charge on April 23, said while the meeting was inconclusive, the ice had been broken and the board had agreed to review the April 16 decisions .
The imperative to resort to imports to reach a level of 80 per cent of coal supplies to power plants has also been agreed upon by the board. This is also in line with the Presidential directive given earlier this year. All the board members, including the seven independent directors, were present at Tuesday’s meet. The April 16 meet had approved a proposal to assure a supply of 80 per cent with a penalty of 0.01 per cent, leviable after three years.
Sources said that the independent directors agreed to the overall policy which envisaged CIL committing itself to a supply level of 65 per cent from domestic sources while relying on imports for the rest.
However for that the price pool mechanism has to be decided which would ensure that the high cost of imports are averaged out. An import level of around 15 per cent may be necessary. “The independent directors felt that the risks of the entire arrangement should be brought out clearly so that CIL is insulated against financial risks.”
At this meet, the board approved the procurement plan for explosives valued at Rs.1,400 crore. CIL’s supplies to the power producers this year is likely to be around 347 million tonnes, requiring imports of around 20 million tonnes.