PricewaterhouseCoopers (PwC) will assist Coal India Ltd to develop a pact for supply of imported coal for power firms entering into fuel supply agreement with the state-owned firm, a CIL source said.
The appointment of the consultant comes at time when independent directors on the board of CIL as well as some state governments, including West Bengal, have shown strong opposition to the idea of price pooling of imported and domestic coal.
"PwC has been appointed for providing consultancy services to help the Coal India to develop a pact for supplying coal to power companies under fuel supply agreement (FSA)," the source said.
CIL had earlier said that with the finalisation of the FSA model and side agreement, the company now looks forward to an advisory service to develop a legally-commercially enforceable agreement between all the parties concerned, including the power plants, CIL and the importing agency.
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"Further, CIL also intends the advisory service provider to develop a suitable notice inviting tender (NIT) in line with the similar arrangements prevalent between the PSU/State, power utilities/industrial units and PSU/Government trading agencies like MMTC ...supply of imported coal on end to end package service basis," CIL's tender document said.
Coal India said it has a legally enforceable fuel supply agreement with power generating companies and under such agreement it is committed to supply 80 of the contracted quantity to the party.
In the present scenario, however, it is likely that there would be a shortfall with respect to the supply of coal through domestic sources to fulfil the commitment.
Hence, the present policy envisages supply of the deficit coal - the quantity falling short of minimum committed quantity through supply of imported coal.
CIL board had last year approved the modified FSA with 65 percent domestic coal and 15 percent imported coal.
Coal India stock price
On January 30, 2015, Coal India closed at Rs 360.85, down Rs 14.3, or 3.81 percent. The 52-week high of the share was Rs 423.85 and the 52-week low was Rs 240.50.
The company's trailing 12-month (TTM) EPS was at Rs 21.06 per share as per the quarter ended September 2014. The stock's price-to-earnings (P/E) ratio was 17.13. The latest book value of the company is Rs 26.04 per share. At current value, the price-to-book value of the company is 13.86.