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Thursday, April 12, 2012

TCI Govt fight over Coal India


Even as Coal India Ltd (CIL) is finalising the penalty clause on the fuel supply agreements (FSAs) it has to sign next week with power producers, The Children’s Investment Fund (TCI) has again exhorted the government to raise coal prices to market levels.

TCI’s argument: the increase in profits can be ploughed back as dividends and used to subsidise coal consumers who can’t afford higher power tariffs caused by the hike in coal prices.

In the past, TCI has alleged that coal prices are being kept 70 percent lower than international benchmarks in India, severely hurting CIL’s profitability. But the government has brushed aside TCI’s concerns, saying lower coal prices mean cheaper power to consumers.

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