| Coal India sets 40% penalty for power project pacts |
NEW DELHI/MUMBAI State miner Coal India agreed on Tuesday to pay penalties for failing to provide sufficient supplies to new power projects that range from 1.5 to 40 per cent of a shortfall, depending on the level of default.
It also agreed to pool the prices of imported coal with domestic supplies but said a final decision on this issue would be taken by the Central Electricity Authority. Such a pricing system would work only if all domestic consumers are willing to accept the resulting higher price, the company said.
“We have no objection to pooling of prices if it is acceptable to all stakeholders,” Coal India Chairman S Narsing Rao told reporters after a board meeting.
The move to fix penalties follows the company’s agreement last week to supply a minimum of 80 per cent of the coal needed for new power projects, bowing to a condition set by the government, and paves the way for it to sign a fuel supply pact for 48 projects.
Coal India had stipulated that it may use a mix of up to 15 per cent imported coal versus 65 per cent domestic.
Coal India, the world’s largest coal miner, produces nearly 80 per cent of the country’s domestic coal supply of about 550 million tonnes but has struggled to increase local supplies for years because of failure to get swift environmental and regulatory approval and inadequate railway infrastructure.
Reuters
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