It is reported that state run Coal India Limited, the country's largest coal miner board recently reviewed the changes in the model fuel supply agreement to be signed with the power firms, but did not take any final decision on it.

Mr S Narsing Rao CIL chairman told reporters here to queries whether the board Monday approved the model fuel supply agreement that "We have reviewed it it is still under consideration. It was not in a signable form today."

He said when asked when the model FSA with changes in penalty clause would be finalized that "Sooner than later."

The agreement has significant changes in the penalty clause for failing to supply a minimum 80 percent quantity of the total fuel contract. The coal major in its last board meeting had agreed to pay penalty of 1.5% to 40% on failing to supply the committed quantity of the fuel to power utilities.

The issue of penalty has been a bone of contention as some power firms had been refusing to ink the fuel supply agreement, opposing the meagre penalty clause in the earlier FSA of only 0.01% applicable after three years of shortfall.

Source - indolink

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