CIL gets Presidential directive to commit fuel to power producers

The government issued a Presidential directive to Coal India that will make it mandatory for the public sector company to supply a minimum level of fuel to power producers

Written by ENS Economic Bureau | New Delhi | Published: April 4, 2012 12:47:26 am

The government on Tuesday issued a Presidential directive to Coal India that will make it mandatory for the public sector company to supply a minimum level of fuel to power producers.

On the same day CIL released its annual results that show it has not been able to reach its thrice-lowered annual production target for 2011-12.

If the company fails to meet the supply commitments under the directive,it will have to pay a penalty. But the coal ministry has left it to the company’s board to decide on the quantum of the penalty.

Under the directive CIL will have to enter into fuel supply agreements with power firms,ensuring that it will meet a minimum of 80 per cent of their coal requirement. Coal minister Sriprakash Jaiswal said the government has the power “that whenever there is an emergency then that power can be used. As we saw an emergency,we have used it.”

The fuel supply agreements (FSAs) are likely to be signed in a day or two.

FE

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