Coal India to continue with 80 trigger level

We have taken some broad decisions at todays board meeting. First,the newly formulated FSA will be revised. Second,CIL will continue with a trigger level of 80 per cent and third,CIL will go for imports and price pooling. Without price pooling,imports will not be viable, Rao said.

He said the 80 per cent trigger level will be maintained with 65 per cent of domestic coal and 15 per cent of imported coal.

CIL had been reluctant to keep the trigger level at 80 per cent,saying it will be tough to supply the contracted coal. This perhaps explains why it had kept a penalty of 0.01 per cent with a three-year moratorium,a clause power utilities werent ready to agree to.

The PMO,according to CILs explanation,had also agreed to bring down the trigger level to 65 per cent in the first year and gradually take it up to 80 per cent in the fourth year. But now,it has decided to stick to a trigger level of 80 per cent.

Rao had earlier said that he was averse to imports and that if the PSU had to import,it would realise the real price. But at Tuesdays board meeting CIL decided to go for imports and adopt price pooling. The Central Electricity Authority CEA was insisting on imports and created a consensus on this issue after talking to state power suppliers that are coming up with new plants and need to enter into FSAs.

According to sources in CIL,price pooling will lead to a price increase of domestic coal since imported coal will have to be supplied at a discount.

Rao said CIL would need to import around 18-20mt in 2012-2013 in order to maintain the trigger. A CIL official said the company was formulating a plan to import through agencies like MSTC and MMTC. FE