Tom Price, global commodity analyst, UBS Equities is of the view that by Coal India signing the FSA (fuel supply agreements) does not secure the supply option. The government needs to incentivise CIL to expand production by creating competition or lift the price of the coal they sell into the market.
Below is the edited transcript of the interview. Also watch the accompanying video.
Q: It is a done deal. The directive is here for Coal India (CIL) and indeed for the power companies but you have a different take that this is a two step back kind of move in terms of providing coal for the entire sector- take us through what your prognosis is?
A: At the moment they are trying to secure supply for the power utilities in India and the way are going about is pushing Coal India into signing these supply contracts, these is fuel supply agreements (FSAs). It seems to me that Coal India doesn