Government may issue presidential direction to CIL to sign FSA

The union government may issue a presidential direction to Coal India next week if the public sector fails to fall in line with the directive from the prome minister's office to sign a fuel supply agreement with power producers with a guarantee of 80 per cent assured delivery.

The coal ministry has already conveyed to Coal India Ltd (CIL) the Fuel Supply Agreement (FSAs) with the power firms would have to be signed, despite opposition from several independent directors of CIL.

"The government has made its stance very clear (even though) the decision on 80-per cent trigger is deferred for the moment,"  The Economic Times reported citing unnamed sources.

CIL is seeking more time to work out agreements with the consumers from the power sector, even as efforts to convince the independent directors to agree to the clause under which a fall in supply below 80 per cent would invite a penalty continue.

Against the backdrop of an acute fuel crunch faced by power firms, the prime minister's office (PMO), had at a recent meeting with representatives of the power firms directed CIL to sign the FSAs with the power firms.

However, the move on assured supply ran into opposition from several independent directors of CIL as also a UK-based minority shareholder, TCI.