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JUL 18 2012

CIL may finalise Rs 1,700-cr explosive contract on Jul 31

  • Economic Times, ET Bureau / Hyderabad
  • Created: Wed 18th JUL 2012

Explosives are consumed in large quantities by subsidiaries of the mining giant for extracting coal

State-run Coal India's board may finalise on July 31 a massive Rs 1,700-crore contract for procuring explosives for mining needs of its subsidiaries apart from resolving fuel supply pact row with power firms.

"List of successful bidders for explosive supplies worth Rs 1,700 crore for the next three years for its subsidiaries will be placed before the CIL board for a final nod," a top Coal India official told PTI.

CIL board meeting is scheduled for July 31 after coal giant postponed meetings a couple of times including on July 5 and July 10.

"Apart from delays in receiving communication about decisions on fuel supply agreements (FSA) from the Prime Minister's Office (PMO), delays in finalising the successful bidders for explosive supplies was also one of the major reasons behind postponements of the board meeting," the official said.

Explosives are consumed in large quantities by subsidiaries of the mining giant for extracting coal from the mines.

It is used in opencast mines as well as underground mines for conducting blasts for coal production.

The Coal giant has also received indications of soon receiving a written communication from the Prime Minister's Office (PMO) with regard to signing of fuel pacts with power firms.

The PMO had to intervene in FSA issue as certain clauses of the pacts, including penalty, had become a bone of contention between the Coal and Power Ministries.

The Prime Minister's Principal Secretary Pulok Chatterjee held a meeting on July 6 to take stock of the situation, particularly, relating to the quantum of assured supplies of coal to the power companies.

According to the earlier directive of the PMO, CIL was to supply at least 80% of the committed quantity of the fossil fuel requirements of the power firms.

Citing reasons such as production constraints, CIL had wanted it to be reduced.

The PMO meeting, as per sources, has decided that CIL would supply between 65 and 80% of the requirement of power companies, for which FSAs could be signed.

Citing introduction of new clauses in the pact, NTPC and many power companies have declined to sign FSAs with CIL. So far, only 27 power plants including that of Lanco, Reliance and Adani, out of 48, have signed FSAs with the state-run coal giant.

The government had in April issued a directive to CIL to commit a minimum 80% of fuel supply to power producers, failing which it would attract penalty.

Tags

Coal Coal India Limited NTPC Ltd PMO Fuel Supply Agreement CIL Power

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