The crucial board meeting of Coal India (CIL) today to finalise fuel supply agreements is expected to be very stormy. NDTV learns that independent directors are not in favour of signing the agreements without verifying the companies asking for coal linkages.
Independent directors, led by a director at IIM-Ahmedabad, told the CIL board in an e-mail that “it would be myopic for the board to believe that Coal-gate (the coal allocation scam) has nothing to do with the signing of FSAs” (fuel supply agreement with power firms).
In the e-mail, Prof. S.K. Barua alleged that “FSAs are clearly designed to bestow favour on chosen projects and power producers”.
Independent directors cautioned the board that if power projects have also received largess from the government in terms of coal block allotment, then the CIL board will be guilty of having favoured the same projects and their owners.
Cautioning on the signing of FSAs, Prof. Barua also asked the board to be prepared with certain details before the board meeting today.
The director has demanded a list of the power projects scheduled to sign the agreements, sources said. Independent directors have also asked for a list of the coal blocks allotted by the government to private firms to ensure that supply agreements are not signed with the same companies.
Prof. Barua’s e-mail, sent on August 28, comes as a surprise for the board because it had agreed to change the FSA clauses in its last meet, the sources said. Under the new clause, CIL will now have to supply 80 per cent of the contracted quantity even if it has to import coal. The company has also agreed to a higher penalty of up to 40 per cent.
Along with Prof. Barua, the CIL board has seven independent directors, seven executive directors, including two nominees of the government.
The other independent directors, including Sheela Bhide and Anis Ansari, have also voiced concerns on the finalisation of the supply agreements, the sources added.
With its prominent independent directors opposing the move, CIL may take more time before signing the supply agreements with power firms.
