Coal India to pay penalty only if supplies go below 65%- Chairman

Coal India is ready to meet 65 per cent of the power companies’ fuel requirement for the first two years through domestic production. This would be despite signing an agreement for meeting 80 per cent of the demand.

“Fifteen per cent of the coal will be sourced from imports. Imported coal would be supplied on cost plus basis only on confirmed commitments from the consumers,” he said.

Coal India Chairman and Managing Director S. Narsing Rao talking said that “There would be penalty applicable only if supplies fall below 65 per cent. For the gap of 15 per cent we would import at cost plus basis only if the buyer(s) wants. If the buyer doesn’t want, we would consider the 15 per cent as deemed supplies.”

On the price pooling, Coal Secretary S K Srivastava said: “The matter is under consideration and dialogue with the Power Ministry, and as in when the final decision is taken on that the board will consider it and they can always review the decision with regard to the imported coal on the cost plus basis.”

To offset the impact of high import costs, the Planning Commission had said CIL should adopt a pooling formula on prices by combining rates of imported and domestic coal.