Apr 04, 2012, 10.01 AM IST

Coal India to sign FSAs with power cos in 24-48 hrs

Power companies have reasons to cheer as the Government of India has directed Coal India to sign the fuel supply pacts with the power producers at the 80% trigger level, reports CNBC-TV18 quoting sources

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Power companies have reasons to cheer as a presidential directive from the Government of India has ordered Coal India to sign fuel supply pacts with power producers at the 80% trigger level, reports CNBC-TV18 quoting sources.

According to government sources, it is just a matter of signing the directive which will mandate Coal India to start signing and implementing fuel supply agreements (FSAs).

Under clause 37 of the memorandum of association of Coal India, the Government of India has the right to invoke �presidential directive' to overrule the board's decision if no consensus is reached on issues related to national interest.

Coal India�s independent directors were against the signing of fuel supply agreements at the trigger level of 80% and the penalty clause involved.

Also Read: At least 10% supply penalty cost likely for Coal India

Coal Minister Sriprakash Jaiswal has said that Coal India's board can decide on the penalty clause. He also added that he saw no reason for CIL to import coal.

He expects the FSAs to be signed anytime within the next 24-48 hours.

In February, the Prime Minister's Office had directed Coal India to sign the supply agreements with the power companies by the end of March 31.