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Coal India has postponed the board meeting scheduled on July 10.
Apart from discussing the amendments in fuel supply pacts, as is suggested by the Prime Minister’s Office, the meeting will finalise a mammoth Rs 1,700 crore contract for explosive procurement by the mining subsidiaries. Explosives are one of the major consumables required for coal production.
Though the official communication does not mention the future date, sources told Business Line that the meeting will be held anytime “next week”.
According to sources, a delay in finalising the successful bidders for explosive supplies was the prime reason behind postponing the board meet.
While the contracts are awarded by the mining subsidiaries, as part of the transparency initiative CIL lines up successful bidders through a complex process of reverse auction.
Meanwhile, sources are upbeat that the board may respond positively to the amended FSA norms, as reducing the trigger level to 65 per cent for three years would eliminate the financial risk of the company.
Earlier, the Union Government ordered CIL to sign FSAs ensuring a committed supply of 80 per cent. To comply with the same the company was required to step up production to 69 million tonnes in 2012-13.
Considering that the company did not have much production growth under the belt for last two years, the board felt that the order would make the company vulnerable to huge payment of penalty for non-compliance of FSAs.
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