Coal India says no final decision on fuel supply agreement

State-run Coal India Limited, the country's largest coal miner, said its board on 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 said to queries whether the board on Monday approved the model fuel supply agreement.



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

The coal major in its last board meeting had agreed to pay penalty of 1.5 per cent to 40 per cent 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 per cent, applicable after three years of shortfall.

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