Coal India board approves signing fuel pacts

Mon Apr 16, 2012 10:35pm IST

A worker shovels coal at a wholesale coal shop on the outskirts of Agartala, Tripura April 3, 2012. REUTERS/Jayanta Dey

A worker shovels coal at a wholesale coal shop on the outskirts of Agartala, Tripura April 3, 2012.

Credit: Reuters/Jayanta Dey

Related Topics

Stocks

   

REUTERS - Coal India's board has agreed for the state-run company to sign new guaranteed fuel pacts with power producers and it will pay a penalty of an average of 0.01 percent of shortfalls in supplies, the company's chairwoman said on Monday.

The company will sign the agreements by April 20, media reports said.

The government, Coal India's largest shareholder with a 90 percent stake, has forced it to sign fuel supply agreements with power producers, guaranteeing to supply 80 percent of contracted quantity.

"For the penalty clause, we have decided to keep it at a minimum and it should be operationalised after three years," Chairwoman Zohra Chatterji told reporters after a company board meeting.

Following intense lobbying by the power sector, the government directed Coal India to guarantee long-term supplies to the power sector, even if it has to resort to imports.

Activist UK investor The Children's Investment Fund Management (TCI), which owns 1 percent of the company, has threatened legal action against the firm's directors for not protecting the interests of minority shareholders.

Coal fuels more than half the power generated in India, which does not produce enough power to meet the demands of a fast-growing economy and increasingly affluent population of 1.2 billion people.

The country has about 10 percent of the world's coal reserves but is still forced to import coal to meet demand.

Coal India's production has virtually stagnated over the past three years as the company battles regulatory and infrastructure hurdles.

(Reporting by Aradhana Aravindan in Mumbai and Harichandan Arakali in Bangalore; Editing by Tony Munroe)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Shares Hit Record

Sensex, Nifty rise to second consecutive record high

Sensex surges 500 points on BOJ easing, L&T gains

The BSE Sensex and Nifty surged to record highs for a second consecutive session on Friday after Bank of Japan's surprise expansion of its massive stimulus programme raised hopes for additional foreign inflows, boosting blue-chips such as Larsen & Toubro.  Full Article 

REUTERS SHOWCASE

Wilful Negligence?

Wilful Negligence?

SEBI piles pressure on Sahara to sell overseas hotels  Full Article 

Indian Economy

Indian Economy

India's fiscal deficit in H1 almost 83 pct of full-year target.  Full Article 

M&M Earnings

M&M Earnings

M&M Q2 net profit down 4 percent, hit by poor monsoon.  Full Article 

Ban on E-Cigs?

Ban on E-Cigs?

Govt considers ban on e-cigarettes, sale of single smokes.  Full Article 

Commodities

Commodities

Silver futures in India hit four-year low on global cues.  Full Article 

BOJ Policy

BOJ Policy

BOJ shocks markets with surprise easing as inflation slows.  Full Article 

Shadow Banking

Shadow Banking

China's shadow banking sector growing rapidly, third largest in world - FSB.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage