Coal India’s (CIL) independent directors want their Chairman S Narsing Rao to close a loophole in the new draft fuel-supply agreements (FSAs) that could allow power-trading firms to benefit from them, sources said.
A note sent to the chairman says that Coal India should get the draft FSAs examined from legal and vigilance points of view, said the sources. The anxiety among the independent directors is that power trading companies that sell power at market prices, or sell a part of their power at market prices, may get assured supply of coal from Coal India.
Coal India’s board is drafting the FSAs that will give power plants a guaranteed supply of coal. Under this, if it fails to deliver the coal that it’s contracted to, the firm will have to pay the producer a penalty ranging from 1.5 per cent to 40 per cent of the price of the fuel.