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No final decision on fuel supply agreement: Coal India

Published: 14th August 2012 12:13 PM  |   Last Updated: 14th August 2012 12:13 PM   |  A+A-

By IANS

State-run Coal India Limited, the country's largest coal miner, said its board Monday reviewed the changes in the model fuel supply agreement (FSA) to be signed with the power firms, but did not take any final decision on it.

"We have reviewed it...it is still under consideration. It was not in a signable form today," CIL chairman S. Narsing Rao told reporters here to queries whether the board Monday approved the model fuel supply agreement.

The agreement has significant changes in the penalty clause for failing to supply a minimum 80 percent quantity of the total fuel contract.

The coal major in its last board meeting had agreed to pay penalty of 1.5 percent to 40 percent on failing to supply the committed quantity of the fuel to power utilities.

The issue of penalty has been a bone of contention as some power firms had been refusing to ink the fuel supply agreement, opposing the "meagre" penalty clause in the earlier FSA of only 0.01 percent, applicable after three years of shortfall.

Asked when the model FSA with changes in penalty clause would be finalised, Rao said: "Sooner than later."

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