Asking Coal India Ltd (CIL) to firm up its coal production operations,the Prime Ministers Office today mandated the company to ensure a supply trigger level of 65 per cent for three successive fiscal years in the Fuel Supply Agreements (FSAs) and ramp it up to 80 per cent by the end of the12th Plan period.
In a major overhaul of the penalty clauses in the FSAs,CIL will now have to shoulder a huge penalty to the tune of 40 per cent in case of deficit in supply.
At a meeting convened by Prime Minister Manmohan Singhs Principal Secretary Pulok Chatterji today the top brass of the coal ministry,including its secretary SK Shrivastava and adviser Alok Perti concurred with the PMO that maintaining a trigger level supply of 65 per cent for 2012-13,2013-14 and 2014-15 is not unfair and can be met by CIL which should culminate into 80 per cent in 2016-17,the terminal year of the Plan period. CIL chairman S Narsing Rao was also present in the meeting.
To ensure that Coal India maintains the tempo of adequate supply,the meeting decided to levy penalty of 10 per cent if the PSU fails to supply up to 65 per cent and manages to provide 60 per cent of the fuel. If it fails to provide up to 60 per cent of the fuel,it will have to shell out 20 per cent as the penalty and further if its supplies are below 55 per cent then CIL will have to pay penalty of 40 per cent. It has been indicated to the coal miner that its force majeure clauses should be modified to an acceptable level. All the recommendations will have to be vetted by the CIL Board in its next meeting.
The recommendations are expected to soothe the flayed tempers within the power sector,which has been alleging that certain provisions in the FSAs are contentious and are heavily titled towards the PSU.