India’s federal government has instructed Coal India Ltd.(533278.BY) to reduce the amount of coal it sells via electronic auctions to 7% of its output by March 2017, from 10% now, and increase the amount of coal available for local power producers, a senior government official said.
In the first nine months of 2011-12, Coal India earned about 21 per cent of its net sales of Rs 42,996.44 crore from e-auction. The decision to cut e-auction quota was taken in a meeting chaired by principal secretary to prime minister Pulok Chatterjee on February 1, said a government official privy to the development.
Prime minister’s office has directed Coal India to sign fuel supply agreements (FSAs) with power producers that have been commissioned till December 2011. These fuel supply agreements have to be completed by end of March. Also, Coal India will sign FSAs with power plants that have to be completed by March 2015.
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