Shares of Coal India rose over 2%, touching the day's high of Rs339.45, on reports the company's board will meet again today, (March 29, 2012), to approve the new draft fuel supply agreement for power plants as directed by the Prime Minster's office.
As per reports, the board of Coal India CIL will meet again today, to decide on the controversial issue of signing fuel supply agreement (FSAs) on the direction of the Prime Minster's office (PMO), as Wednesday's (March 28, 2012) discussions on the issue remained inconclusive.
Reports, however, suggested that a large number of issues related to FSAs were agreed upon in Wednesday's meet. Independent directors on the board reportedly raised some concerns, including tweaking of the FSAs, which the PMO has ordered to be signed with power companies by the end of the month. The agenda of today's meeting would reportedly include the issue of minimum guaranteed amount of coal that the company will promise to supply power producers.
Prime Minister Manmohan Singh on February 15, 2012 directed Coal India to sign FSAs with power plants that have entered into long-term Power Purchase Agreements (PPAs) with power distribution companies and have been commissioned/would get commissioned on or before March 31, 2015. Singh has directed Coal India to guarantee supplies to the private power sector in a bid to alleviate the nation's chronic energy shortages.
For power plants that have been commissioned up to December 31, 2011, Coal India will sign FSAs before March 31, 2012. The FSAs will be signed for full quantity of coal mentioned in the Letters of Assurance (LoAs) for a period of 20 years with trigger level of 80% for levy of disincentive and 90% for levy of incentive. In case of any shortfall in fulfilling its commitment under the FSAs from its own production, Coal India will arrange for supply of coal through imports or through arrangement with State/Central PSUs who have been allotted coal blocks.
A statement from the PMO had said that these arrangements would provide relief to power plants with estimated capacity of more than 50,000 megawatts (MW). The proposed set of arrangements is being seen as a major step forward in solving the problems of power sector in the country and is likely to boost investors' confidence in India's power sector, the statement added. It will help not only in achieving power generation capacity targeted in the 12th Plan but also assist in achieving the targeted growth of GDP, according to the statement.
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As per reports, the board of Coal India CIL will meet again today, to decide on the controversial issue of signing fuel supply agreement (FSAs) on the direction of the Prime Minster's office (PMO), as Wednesday's (March 28, 2012) discussions on the issue remained inconclusive.
Reports, however, suggested that a large number of issues related to FSAs were agreed upon in Wednesday's meet. Independent directors on the board reportedly raised some concerns, including tweaking of the FSAs, which the PMO has ordered to be signed with power companies by the end of the month. The agenda of today's meeting would reportedly include the issue of minimum guaranteed amount of coal that the company will promise to supply power producers.
Prime Minister Manmohan Singh on February 15, 2012 directed Coal India to sign FSAs with power plants that have entered into long-term Power Purchase Agreements (PPAs) with power distribution companies and have been commissioned/would get commissioned on or before March 31, 2015. Singh has directed Coal India to guarantee supplies to the private power sector in a bid to alleviate the nation's chronic energy shortages.
For power plants that have been commissioned up to December 31, 2011, Coal India will sign FSAs before March 31, 2012. The FSAs will be signed for full quantity of coal mentioned in the Letters of Assurance (LoAs) for a period of 20 years with trigger level of 80% for levy of disincentive and 90% for levy of incentive. In case of any shortfall in fulfilling its commitment under the FSAs from its own production, Coal India will arrange for supply of coal through imports or through arrangement with State/Central PSUs who have been allotted coal blocks.
A statement from the PMO had said that these arrangements would provide relief to power plants with estimated capacity of more than 50,000 megawatts (MW). The proposed set of arrangements is being seen as a major step forward in solving the problems of power sector in the country and is likely to boost investors' confidence in India's power sector, the statement added. It will help not only in achieving power generation capacity targeted in the 12th Plan but also assist in achieving the targeted growth of GDP, according to the statement.
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