CIL board may take up price-pooling issue tomorrow

The Coal India board is expected to take up the issue of coal price pooling at a meeting tomorrow for the implementation of the modified Fuel Supply Agreement (FSA).
    
"The issues pertaining to FSA will come up in board meeting tomorrow," a CIL director told PTI.
    
The board meeting will begin tomorrow evening after the annual general meeting (AGM).
    
The CIL board had failed to reach a consensus on price pooling mechanism on August 31.
    
"The Board has asked the management to come back with a business model for price pooling," CIL Chairman S Narsing Rao had said after the last board meeting.
    
"Price pooling is a mechanism to implement FSA... If price pooling is approved then 15% supply of imported coal will be not in the cost plus method, but in pooling mechanism," he added.
    
CIL Board had approved the modified FSA "with 65% domestic coal and cost plus for 15% imported coal supply" to meet 80% assured supply of the contracted quantity to power companies.
    
It is estimated that CIL would need to import 20 million tonnes of coal this year to meet the demand of power companies but board wants to ensure pooling would be at least revenue- neutral to CIL.
    
Earlier, Rao had said that if price pooling was implemented, all the power consumers would have to bear the impact, adding that, however, it should be neutral to CIL.
    
To offset the impact of high import costs, the Planning Commission had said that CIL should adopt a pooling formula on prices by combining rates of imported and domestic coal.
    
So far, only 29 power companies, including Lanco and Adani have signed FSAs with CIL.